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PUBLISHED IN LONDON AND FRANKFURT 


no. 28,816 Monday July 5 1982 *** 3 o P 

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MAYS SI MM ARY 


Strike hobbles BR 


GENERAL BUSINESS 

Triple Tory call 

killer for shift 

dies in to private 

shoot out ownership 


Tory call but drivers’ attiti 
for shift w jxi be clearer td 


kPVv 

sft \ 


ft 




BY IVO DAWNAY, LABOUR STAFF 


The hunt for triple killer Barry 
Prndora ended when he died in 
a shootout with police marks- 
men. 

Prudom, also armed w-rth a 
machette, opened fire after re- 
fusing ta surrender at a tennis 
dub in Malton, North York- 
shire. yesterday, after a 17-day 
search. 

TSie net closed on the killer, 
whose victims included two 
po Firemen, after he held a 
couple hostage in the town. 

Korchnoi ‘wins 9 

Chess grand master Victor 
Korchnoi was reunited with his 
family in Zurich, after they won 
a six-year battle to leave the 
Soviet Union. 

Jenkins decision 

Roy Jenkins, after his SOP 
leadership election victory, said 
he intends to resign as a direc- 
tor of the merchant bank 
Morgan Grenfell. Back Page 

Shuttle lands 

The U.S. space shuttle = landed 
in California after its fourth 
and final test flight. President 
Reagan was among 500,000 
sightseers who watched the 
touch down. 

Soviets expelled 

The Netherlands expelled two 
Soviet diplomats accused of 
spying on Dutch and Nato mili- 
tary facilities, an Amsterdam 
newspaper reported. 

Disco report 

Compensation claims amounting 
to £10m are likely to be started 
after publication today of a . 
hard-hitting report - iutn- the' 
Stardust QiUb disco blaze in ' 
Dublin, in which- 48 died. . 

Hijacker held 

Sri Lankan Sepals Ekanayake. 
who obtained a £175,000 ranscun 
after hijacking an Italian air- 
liner and getting safe conduct 
out of Thailand, has been 
arrested after a two-day spend- 
ing spree in Sri Lanka. 

Spanish blast 

A Spanish Civil Guard was 
killed and another injured when 
a nailbomb blew up their car 
near Pamplona. Page 2 

Vatican claim 

Makers of £lm worth of unsold 
pa par souvenirs are seeking 
compensation from the Vatican. 
Fapa! “ licensers "said delay in 
deciding whether the Pope's 
visit to Britain would go ahead, 
contributed to bad sales. 

President dies 

Dominican Republic President 
Antonio Guzman, 71, died in a 
shooting incident which was 
described by the country’s 
defence minister as accidental 

Transport move 

The Government is expected to 
introduce a Short Bill in the 
next Parliamentary session 
which will remove London 
Transport from the Greater 
Tendon Council’s control. 
Page C 

Connors triumph 

Jimmy Connors, who won the 
Wimbledon men's title in 1974, 
recaptured it beating John 
McEnroe 3 — 6, 6—3, 6 — 7 — 6, 

P — l. 

World Cup 

Northern Ireland’s challenge 
ended when they were beaten 
4 — l by France. Gerry Arm- 
strong scored their goal 

Briefly - - . 

Archhishnp Annibale Bugnini. 
the papal nuncio to Iran, died in 
Rome, aged "0- 

polish couple and their child 
flew to Austria in a helicopter 
and asked for asylum. 


• THE CONSERVATIVE Party 
manifesto for the next General. 
Election should concentrate on 
shifting to private enterprise 
many of the activities now 
carried out by the public 
sector. This view was voiced at 
the weekend by Sir Geoffrey 
Howe, the Chancellor, In a 
Cambridge lecture. Back Page 

• SAUDI ARABIA and other 
Gulf oil producers are expected 
to press African exporters to 
rasie the price of high-quality 
crudes by at least $LS0 a barrel 
at this peek’s Opec meeting. 
Page 2 

• MERCHANT BANKS are 
losing a significant share of 
pension fund asset management 
to other financial institutions. 
Page 6- 

• AUSTIN HOVER group of 
BL will ask UK component 
suppliers to cut prices further 
or risk the Corporation buying 
from overseas. Page 6 

• ISLE OF MAN Government 
has asked the Bank of England 
to review the structure of island 
banking after recent bank 
collapses. Back Page 

+ GUINNESS PEAT, the 
■troubled group which on Friday 
disclosed a £J5m loss provision, 
is to sell control of its com- 
modity business to investors led 
by Lord Kissin in a film defcL 
Back Page 

• NISSAN of Japan, which 
nukes Datson cars. wiH almost 
certainly shelve plans to build 
a UK- car plant Back Page 

• CHEMICAL BANK, ot the 
UE- is expanding activities in 
Europe. Page 6 

• BALFOUR BEATTY and 
Dominion Bridge, of Toronto, 
have won a construction con- 
tract -from Indonesia worth 
$73in (£42Llm) for a coal ter- 
minal. Page 4 

• CVCOnickel production wor- 
kers in Toronto have voted to 
end their 32-day strike, but will 
not resume work due to 
extended summer closure 
Page 16 

• CURRENCIES remained 
within the agreed divergence 
limits of the European 
Monetary System since last 
month’s devaluation of the 
French franc and Italian lira 
and revaluation of the D-mark 
and Dutch guilder. The lira has 
since been the strongest mem- 
ber of the system, followed by 
the French franc, while the 
D-mark and guilder finished 
last week virtually level at the 
bottom of the EMS. Easing of 
pressure has enabled the Bank 
of France to reduce steadily 
interest rates, including a cut 
of 0.25 per cent to 15 per rent 
on Friday in the bank’s money 
market intervention rate. 


THE STRIKE by the train 
drivers' unions brought the 
British Rail (BR) network to 
a virtual standstill yesterday, 
though managers believe that 
the true level of support for 
the action will only become 
evident today. 

Some trains, particularly in 
the Southern, East Midlands and 
North Eastern regions, com- 
pleted their journeys and BR 
claimed that sporadic services 
were maintained on the London 
to Gatwick and boat train 
routes. 

However, it acknowledged that 
no more than 85 drivers out 
of a total of mpre than 5,000 
reported for duty. Of the 85, 
fewer than 20 were members 
of the striking Associated 
Society of Locomotive Engin- 
eers and Firemen (Aslef). 

Mr Clifford Rose. BR’s indus- 
trial relations director, said 
that today would prove the 
"acid test” of how Aslef s 
20.000 members reacted. "We 
are fairly sure there is a lot of 
concern being expressed down 
the line and a lot of drivers are 
conveying their concern to the 
leadership” he said. “ How that 
concern manifests itself 
remains to be seen." 

But Mr Ray Buckton, the 
Aslef general secretary, said 
that action yesterday had 
demonstrated the drivers' 
united response to BR’s “pro-, 
vocative action’* in refusing to 
acept the union's proposals for 
a peaceful settlement 

“ Footplatemen are united, in 
spite of the massive campaign 
being waged by the British Rail 


Board, the Government and the 
media,” he said. “The Board's 
actions must now be condemned 
by the trade union movement 
and the people of this country.” 

However, BR managers and 
Aslef officials recognise in 
private that the outcome of the 
dispute depends on the extent 
to which drivers turn up for 
work over the next few days. 
If the trickle of Aslef drivers 
working becomes a stream, BR 
will continue in its attempts to 
run a service. But, if there is no 
significant rank-and-file revolt 
against the strike, the Board will 
begin to implement plans for a 
total shutdown of the railway — 
possibly as soon as next Sunday. 

Letters, to state that drivers 
were deemed to have dismissed 
themselves by going on strike, 
could be distributed in the 
middle of the week, as could 
notices of suspension to the 
250,000 members of the National 
Union of Railwaymen and the 
Transport Salaried Staffs’ 
Association. - 

BR believes that to lay off 
all its staff, including those not 
on strike, would underline its 
determination to see the strike 
through and would put extra 
pressure on Aslef. 

But a lay-off would also be 
necessary to retard the rapid 
deterioration of its position. The 
Government’s public senFfte 
obligation grant of £15m a week 
has already been withdrawn and 
BR expects to exhaust its £150m 
Government “overdraft” faci- 
lity within a fortnight. Lost 
receipts of £6m a day woujri 


leave BR unabie“Topay its 
£35m-a-week wages bill. 

A patchy return to work 
would not be enough to satisfy 
the BR Board that a reduced 
service was worth operating. 
Managers will be looking care- 
fully today at the turnout in 
its high-earning areas, such as 
Southern Region's commuter 
routes and the main industrial 
goods services in the north of 
England. BR is especially con- 
cerned lest it lose vital contracts 
with the National Coal Board, 
the Central Electricity Gener- 
ating Board, the Post Office and 
national distributed news- 
papers. 

Rail services reported by BR 
to be operating partly yesterday 
included: Newcastle-Edinburgb; 
Cardiff-Bristol; Birnringbaim- 
Leicester; London Victoria- j 
Gatwick: Victoria -Dover: 

London Liverpool Street-South- 
end and various local services 
across the country. The vast 
majority of those trains were 
driven by NUR members. That 
union accounts for only 1,600 
BR drivers, compared to more 
than 18,000 represented by 
Aslef. 

Coach finks to Harwich and 
the Channel ports have been 
laid on, though travellers to the 
Republic of Ireland, ihe Isle of 
Man and the Isle of Wight have 
been advised to make their own 
way to the docks. 

Sealink UK BR's boat ferry 
subsidiary, reported normal 
working yesterday, though a 
separate dispute at Harwich has 
left only Dutch ferries serving 
the route. 


Miners prepare for tough action 
in pursuit of 31% wage claim 


BY JOHN LLOYD, LABOUR EDITOR 


EMS Ju ly 



THE National Union of Mine- 
workers is set to approve to- 
morrow a wage claim of 31 per 
rent, which is likely to be 
backed by tight centrol control 
of pay negotiations and a threat 
of strike action if talks break 
down or are prolonged. 

The strongly worded daim 
comes as the coal industry faces 
serious financial problems due 
to lack of demand. It will put 
the mineworkers in direct con- 
frontation with the Government 
early in the pay round and pro- 
vide a gruelling test for the 
union’s new president, Mr 
Arthur Scargill. 

Mr Scargill said yesterday he 
believed a pay battle and the 
dispute with the board over pit 
closures could become inter- 
twined. 

He- hoped that the mine- 
workers’ conference, which 
begins in Inverness today, 
would reaffirm a position of 
total support for the train 
drivers’ strike. He added that 


he believed that miners would 
be “ inexorably ” drawn into the 
rail dispute, since coal would 
not be moved and overflowing 
stocks would stop production. 

He intends to seek an in- 
principle agreement for indus- 
trial action — including strike 
action — over the closures issue. 
Members will be balloted. He 
said that acceptance of the 
executive's report, to be pre- 
sented to the confrcnce, would 
mean acceptance of the need for 
direct action over the issue. 

He also revealed that the 
National Coal Board had sought 
to make a common plea with 
the NUM to the Government for 
a change in the Mines and 
Quarries Act. whereby mine- 
workers would work a shorter 
week hut longer shifts. Mr 
Scargill said the executive had 
unanimously rejected the plan, 
since itd id not propose to cut 
total hours worked in a week. 

The NCB estimates that the 
claim, for a basic min imum of 
£115 for the lowest-paid grade 


ofsurface worker (56) with 
similar percentage increases for 
other grades, would cost £420m 
a year. It would bring the basic 
minimum for face workers up to 
nearly £160 and average earn- 
ings for face workers to nearly 
£ 220 . 

The draft claim already has 
the backing of powerful areas, 
such as Yorkshire, South Wales 
and Scotland, and sets out a 
tough programme for prosecut- 
ing it. If passed, it will be sent 
to the board after the first 
executive meeting following the 
conference. It demands that 
negotiations be completed by 
the November 1 settlement date. 

The negotiating committee, 
made up of one executive 
member from each NUM area, 
must report back to the full 
executive at every stage of 
negotiations: failure to agree to 
the demands or to observe the 
timetable will result in the 
calling of a special national 
delegate conference. 




ECU WEffiEWE r -I 

1 J 


_ MfT.' 


Tha chan shows the rwo constraints 
on European Monetary System exchange 
tales. The upper grid based on the 
weakest currency in rhe system defines, 
the eioss rates from which no currency 
I except the lira) may move more than 
yi, per cent- The . lower ehmrt fllvos 
each currency's divergence IrOffl the 
"central rate" ageinrt the European 
Currency Unit {ECU) itseh a basket 
of European currencies. 


Israel rejects PLO demand to 
retain some presence in Lebanon 


BY DAVID LENNON IN TEL AVIV AND JAMES BUCHAN IN BEIRUT 


CONTENTS 


OECD: .U-S. overcomes EEC 

resistance . ^ 

Management: Profits the 
great misconception 10 

Justinian: ■ Temptation of 
palm tree justice 9 


Editorial comment: Aslef 
strike; SDP leadership; Mr 

Shultz’s task 12 

Lombard IS 

PLO: Defiance in the face 

of defeat 12 

Survey: Japan ......... inset 


C* * . / -J 

> j ! ; 


Am 

Appointomanu UK 
Imenuiional ... 

Baw Run 

Building Notes .. 
Bus' man’s Diary .. 
Cnmpany NiM 

CroMwenl • 

EsisilMi. Gtitda 

Euromarhats 


11 Financial DiUV 1* 

a Insurance .... • • 17 

Inti. Gap. Market* 15, 16 

iml. Co Nw» ... IS, 16 

1 4 La* Back 

2D Labour •• • 

7 Leaders 1- 

14 La tiara If 

Lombard 13 

*' Management .... 10 

11 Mon Mt Matters . 17 

17 Money & Eaehng*. 22 


Overseas News . 2. 3 

'Parliamentary Dlaijr 12 

Racing , 9 

Share Information 24. 25 

Technology ID 

TV and Radio .9 

UK Newe 6> 7 

Unit Trusts . . 23 , 

Weather Back ; 

World Eeon. Ind. 3 1 
World Stock Mktf. 21 I 
World Trad* a 


For latcvr Share Index plume OX-24S M2G 


THE Israeli Cabinet yesterday 
tofaHy rejected demands from 
the Palestine Liberation Organ- 
isation that it should be allowed 
to retain some presence in 
Lebanon in return far the with- 
drawal of the estimated 6.000 
Palestinian guerrillas trapped 
in West Beirut. 

At the same time Israeli 
forces tightened their grip on 
the western part of the 
Lebanese capital, shelling the 
southern suburbs and blocking 
the flow of vital food and other 
supplies from the east 

But after the Israeli Cabinet 
meeting in Jerusalem, senior 
officials said they had received 
optimistic reports from the 
U.S. on the progress of diplo- 
matic negotiations designed -to 
persuade the PLO guerrillas to 
leave Beirut. 

The officials said the Cabinet 
had not received any written 
proposals or detailed plan for 
ending, the crisis. But because 
of Press reports of a six-poinl 
plan signed by Mr Yasser 
Arafat, the PLO chairman, the 
Cabinet decided to clarify its 
position. 

A Cabinet communique 
stated: “The Government of 
Israel rejects without any 
qualifications whatsoever every 
proposal concerning any 
presence . . . political, organisa- 
tional. military-symbolic... of 
terrorists in Lebanon. All of 
them, withnut any exception, 
should leave Lebanon. Nn 
change in Ihe existing fines in 


Lebanon will be carried out 
without the consent of the 
Government of Israel.” 

But tq soften the tone of the 
statement, a senior official said 
afterwards that Israel would 
grant the U.S. more time to try 
to negotiate a PLO withdrawal. 

He said rhat there was a 
problem in judging whether the 
PLO was seriously negotiating a 
peaceful withdrawal, or merely 
playing for time. This stems, 
the official said, from the fact 
that communications are so 
indirect and so many intermedi- 
aries are involved in the 

negotiations. 

In Beirut. Mr Saeb Salam, the 
former Lebanese premier who is 
playing a vital role in the nego- 
tiations, said yesterday he 
believed that Mr Philip Habib, 
the U.S. envoy, supported the 
idea of a multinational force 
entering West Beirut and super- 
vising the disengagement nf 

forces and the security of the 

city. 

This suggestion is being 
vigorously backed by the 
French whose special envoy M 
Francois Gutmang is reported 
to have said that such a force 
could he formed within 24 
hours. 

In Cairo, senior Egyptian 

officials said that President 
Hosni Mubarak had received a 
“very importanr” letter from 
President Reagan on ways of 
sohing the Lebanon crisis. 

The main Egyptian concern 
■was said 10 be preventing an 


all-out Israeli assault on Beirut 
and officials hoped that the U.S. 
would not veto a new United 
Nation's Security Council reso- 
lution being prepared in co- 
operation with France. 

Colonel Muammar Gaddafy, 
the Libyan leader, yesterday 
urged the PLO leaders in Beirut 
to commit suicide “ rather than 
accept shame." 

Your suicide will Immortalise 
the Palestinian cause for future 
generations.” he wrote in a i 
gram. ” Your blood will fuel 
the inevitable revolution from | 
the Atlantic Ocean to the Gulf." 

The Israeli Cabinet explained 
yesterday that it would not be 
deflected from its path by anti- 
war demonstrations such as the 
huge rally In Tel Aviv’s 
municipal square on Saturday 
night which police estimate was 
attended by 70.000 people. 

The demonstration was 
organised by the Peace Now 
Movement and called for an end 
to the fighting, a negotiated 
peace with the Palestinians and 
the dismissal of General Ariel 
Sharon, the Defence Minister. 

There were dashes on the 
occupied West Bank yesterday 
between Israeli troops and 
Palestinians demonstrating 
against Ihe Israeli invasion of 
Lebanon. A number of 
Palestinians were reported 
injured. 

There was also a partial com- 
mercial strike on Ihe West Bank 
as many shopkeepers responded 
in a call to close down for two 
days. 


Sluggish | EEC considers 


economic 

recovery 

forecast 


f By Max Wilkinson. 

Economics Correspondent 

THE RECOVERY of Ihe UK 
economy will be very slug- 
gish this year, with a slow 
improvement lu 1983, accord- 
ing to a Financial Times 
analysis of 15 leading fore- 
casts. 

The consensus points to a 
growth of output of little 
more than 1 per cent this 
year, compared to the level 
last year, with growth next 
year of just over 2 per cent. 

The forecasters surveyed 
include the Treasury, the 
International Monetary Fund, 
leading Independent UK fore- 
casters as well as university 
and City groups. 

The latest FT average 
prediction reflects a general 
increase In pessimism since 
the spring, when the Treasury 
and many other forecasters 
were expecting growth of 
about 11 per cent or even 
more Tor this year. 

However, the rise in U.S. 
Interest rates, the strength oF 
the dollar, the sluggishness 

CONSENSUS OF FORECASTS. 

UK ECONOMY 
Annual per cent increase 

1982 1983 

Output lj 2s 

Inflation (4th quarter) 8$ 8 

Unemplymt. (adult, m) 3 3.1 

of output during the winter 
and renewed anxieties about 
the trend of Imports have led 
the Treasury team and most 
others to lower their sights. 

The FT average prediction 
for growth this year indicates 
a broad consensus rather than 
any precise forecast. It is 
almost exactly the same as the 
consensus which emerged 
from a similar exercise In 
December. This suggests that 
those forecasters who were 
encouraged this year, by the 
hope of falling Interest rates 
and other favourable factors 
have reverted to a mare 
cautions view. 

The forecasters are signi- 
ficantly more optimistic, 
though, about the prospects 
for inflation than they were at 
the end Of lest year. The 
consensus now points to an 
annua] rate of less than 9 per 
cent by the end of this year. 

The forecasters are also 
looking for a substantially 
lower public sector borrowing 
requirement for this year 
than they previously 
expected. The general view is 
that borrowing could be 
perhaps £750m less than the 
£9.5 bn predicted by the 
Treasury in March. 

Details, Page 6; Lombard 
Page 13 


new sources 
to boost budget 


BY JOHN WYLES IN. BRUSSELS 

PLANS to diversify the 
European Community’s sources 
of budget revenue are being 
developed within the European 
Commission in anticipation of 
the need for extra income in the 
1984 . budget year. Member 
governments may be asked to 
adopt a combination of budget 
measures including an EEC 
energy import tax and industrial 
levies. 

Confirming this work is now 
underway. Mr Christopher 
Tugendhat. the Budget Commis- 
sioner. said yesterday that the 
Commission would soon need io 
have proposals ready for 
diversifying the Community's 
income. 

Significantly. Mr Tugendhat is 
against recommending any in- 
crease in the current 1 per cent 
limit on member slates' Value 
Added Tax payments to the 
EEC. 

The move to increase the 
VAT limit is vigorously opposed 
by Britain and West Germany 
which are the only countries to 
pay very much more into the 
EEC. Budget Than they set back 
through Community policies. 

Their complaints about 
shouldering an unfair financial 
burden, coupled with the fact 
that the J per cent ceiling is 
looming, is tending to put a 
stTaightiaekPt on the develop- 
ment of EF.C oolicies requiring 
injections of funds. 

Currently, the Community’s 
money comes from the transfer 
to Brussels by member slates 
of all customs duties artf levies 
on agricultural imports plus up 
to 1 per cent of VAT payments. 

Revenue ceiling 

The proposed 1983 Budget of 
more- than £12bn is only around 
£825 m sfrort of the revenue ceil- 
ing fixed by the 1 per cent 
limit. 

"It would be Irresponsible 
not to have other sources nr 
revenue ready by the end of 
1983." said Mr Tugendhat. 

Before putting proposals to 
the Commission he and his staff 
are examining a combination of 
measures including: , 

• An energy import tax. The J 
idea of an nil tax has had a i 
lot of support within the com- i 
mission over the past three i 
years and the stabilisation of : 
nil wires now makes it more 
nnlitically attractive. Poorer " 
memher states, heavilv depend- 
ent on oil imports would have 
to be specially protected but 
one of the advantages of an oil - 
import tav j s that it would fall 
less heavily than does the v VT 
burden on Britain and West 
Germany. 


• Applying the VAT rate pro- 
gressively so tha i* richer mem- 
ber states pay in proportionally - 
more to Brussels than those 
with less than the Community's 
average Gross Domestic Pro- 
duct. This would ensure that 
the Benelux countries and : 
Denmark carry a larger share 
of financing EEC policies. 

• Industrial levies to finance, 
particular policies of benefit to 
industry. The model here would 
be the Goal and Steel Com- 
munity where steel producers 
pay a small annual levy on turn-, 
over to generate income for a . 
variety »f industry schemes 
and a base for Community loans. 

Several schemes 

A number of financing' 
schemes may be needed slucc no 
single one is likely to supply 
enough income in the EEC 
Butisei to finance policies for a 
12-member Community after 
the accession of Spain and 
Portugal. 

As the most reluctant to add 
to EEC resources. Britain and 
Germany will want firm assur- 
ances that any extra funds will 
not be soaked up by the Com- 
mon Agricultural Policy. 

Mr Tugendhat believes that 
they could be satisfied if the 
Ten adopted a new regulation 
setting an annual maximt^n 
rate of growth for farm 
spending. 

An important advantage of 
diversifying the Budget's in- 
come is that it could take some 
of the strain off the VAT sys- 
tem. Conceivably, the annual 
VAT " take ” could move up- 
wards or downwards with addi- 
tional resources coming from 
the new Budget channels. 

Although such changes would 
not dispose of the problem of 
Britain’s excessively large pay- 
ments to Brussels, they might 
make it less acute. 

In any rase, ihe launchins 
of a negotiation on new Budget 
resources could take the pres- 
sure off the JK to seek a long- 
term settlement of its Budget 
problems this autumn. 

London may be persuaded rc. 
accept another one-year curb 
on its Budget payments to b& 
followed by a longer term 
arrangement which would take 
into account the impact of new 
arrangements for increasing Ihe 
size of the EEC budget. 


2 in New York 


July 2 Previous 


Spot |S 1.7535-7350 81.7405-7430 
1 month .0.41-0.44 pm' 0.58-0.43 pm 
3 months 1.35-1.40 pml 1.53-1.36 pm 
12 months 4.80-4.90 pm 4.72-4.65 pm 


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Excellent 

Communications 

Unrivalled transport facilities 
serve the immediate locality 
with Victoria Station (Vic- 
toria, Circle and District 
Underground Lines) provid- 
ing easy access to all parts 
of Central Lnodou. The 
Southern Region terminus 
provides frequent services to 
many parts of Kent, Surrey 
and Sussex together with a 
direct link to Gatwick Air- 
port The bus station also 
provides regular communica- 
tions throughout Central Lon- 
don and inner suburbs. 

Joint Sole .1 cents are: 

D. E. & J. Levy 
Tel: 01-930 1070 
Hillier Parker May & Rowden 
Tel: n 1-623 7666 


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A FINANCIAL TIMES CONFERENCE 

_ Business 


Guard killed 
in Basque 
bomb attack 


By Tom Bum Jn Madrid 


-A BALANCING OF INTERESTS 


Hotel Inter .Continental, London, 

July 12 & 13, 1982 

This two-day conference, which follows the publication of 
the Cork Report, will examine the current state of the Law 
and its practical applications and will pose the question ‘is 
there a better way?’. A feature of the programme will be a 
comparison with American Law and Practice. 

Speakers will include: 


Lord Benson 

Adviser to the Governor 
Bank of England 

Sir Kenneth Cork, gbe 
Senior Partner 
Cork Gully &Co 

MrSAWCarslake 
Assistant General Manager 
Barclays Bank pic 

Mr F<3 Fisher, Jr 
Senior Partner & Head of 
Commercial Practice 
Hale & Dorr, Boston 


Mr Muir Hunter, oc 
Member of the insolvency Law 
Review Committee 


MrWGMackay 

Partner 

Ernst &Whfnney 


The Hon Thomas W Lawless 
Chief Bankruptcy Judge 
Bankruptcy Court, Boston 


MrLRPincott,CBE 
Former Chief Executive 
Stone Piatt Industries Ltd 


Special permits 
for Gibraltar 


Business 

Reorganisation 

-A BALANCING 
OF INTERESTS 


ToFfaimcial Times limited. Conference Otpanlsa&oa, Mailer Hone 
Arthur Street London EC4R9AX 

Tefcd-621 1355 Tatac 27347 FTCONFG Cabins: HNCONF LONDON 


By Our Madrid Correspondent 


Ptease send me further details of 
BUS&tESS REORGANISATION CONFERENCE 


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Company 



A HNANCIALTIMES 
CONFERENCE 


Address 


Telex: 


THE Civil Governor of Cadiz 
Province, who has jurisdiction 
over the Spanish side of the 
Gibraltar frontier, said yester- 
day Spain would be more 
flexible in granting special 
permits to cross the border 
with the British colony which 
was to have opened last month. 

Governor Jose Gonzalez Pala- 
cios said he would extend 
permits for humanitarian 
reasons in cases of grave 
illnesses and funerals. 

. The promised, permits did not 
appear to indicate any new 
move on the part of Madrid 
over the border following its 
decision last month not to lift 
the 13-year-old restrictions on 
the land frontier. 


COMPANY NOTICES 


PERSONAL 


CONTRACTS AND 
TENDERS 


LAFARGE COPPEE 


A French Limited Company with an' Authorised Capital of FF.775.702.20O 


Head Office: 28, rue Emile Mdnfer— Faria 10. 
RC5 PARIS B S4Z 105 572 
El RET S4Z 105 572 0001* 


At drawl no* nude hi Jane 1982 In 
the. presence of a Notary Public In 
Stockholm. Deposit Certificate* In respect 
of Bonds of 

THE GERMAN REICH 4% Cf pr murty 


FACT 


8%) EXTERNAL LOAN OF 1930 
(the " Match Loan "1 


TO HOLDERS OF 1330% -BONDS DUE 1989 


NOTICE OF MEETINQ 


SECOND CONVOCATION 


. . NOT’S® 15 HEREBV GIVEN to hoMca or 1530% Bonds 3981-1989 
2* U.S-S1 .000 nominal e»ch tti*r as the reouired Quorum was not oresam ot 
tfw Ordinary Meeting of tlm General Assembly beid -following the First Convocation 
on 28tfa Jdi» 1982. no action could -valid ly be taken, end that consequently 


on 28tfa Jo no 1982. no action could -valid ly be taken, end that consequently 
the meeting -has been reconvened for Tuesday. 13th July 1982 at 09H0O at the 
Office of CREDIT COMMERCIAL DE FRANCE. 103 Avenue des Cftunps-Elystas. 
Paris 8, France, for u»e same purposes, wfifch are as foikra*: • 


— 1° "PWlnt two people to represen t the -Maase" Ns explained m the 
Pnisocctus dated 23rd June 1 981 > and two people to replace them should 
the need arise. 


— To tor the powers and the rwn i mtr a tto u of these Representatives. 


No Quorum Is required for this meeting. Decisions will be taken by a 
simple majority ol those voting, whether In person or by proxy. 

Any bondholder, regardless of the number of bonds which he holds, may 
attend and vote at the meeting or may appoint a proxy to legally, represent him 
and vote on his bchali. 


.. Howeve r , o nly bondholders who have deposited their bonds hve days at 

.I?"? t * B _ at either the Head Office of the Company. 28 rue 


Champs-Elysdes. Parts 8. or one of the following banks 

— CITIBANK N.A., 11 Old Jewry, London EC2. England 

— CITIBANK N.A. Avenue de Tcrvurai 249. 1150 Brussels. Belgium 

— CITIBANK N.A.. P.O. Box 35BS. New York N.Y. 10043, U.S.A. 

— KREOIETHANK S-A. LUXEMBOURGEOISE. 37, ruo Notre- Qe me. Luxembourg 

‘Mend the meet ing or apnofnt « prosy to attend for them. They will be 
Issued with the necessary admission card andfor proxy form. 


,h5f°?2S t, ? n ° r of . bond s and proxies received IPr the meeting 

281,1 June will remain valid for the meedng ol the 13tf» July unlcu 

rcvoRca. 


BOARD OF DIRECTORS 


totalling US 56 8 8,1 DQ were drawn for 
redemption as at the 15th July. 1982. 

Lists of certificates drawn can be ob- 
tained at Lazard Brothers A Go.. Umlted, 
21 Moorftelda. London. EC2P 2HT. 

The certificates we payable on the 
condition given in the certlheaoes as 
from the 15th July 1982 at any of .the 
Offices of Stand Inavlska Etefclfdfi Banker 
and Gotabanken as well as at the offices 
of the other Paylnn Agents. 

No Interest will be paid as from 15th 
July 1982 on eerttteata tfrawn. 

Certificates presented lor red emption 
shall be accompanied by all the Interest 
coupons which are not yet doe lor pay- 
ment. Otherwise, an amount equivalent 
to the missing coupons . wiH be wtth- 

The holder of a certificate which has 
been drawn will receive on Its redemp- 
tion a voucher In respect or the ngnt 
attaching to the certificate to receive 
" Funding Bonds " when Issued- 

Any of the drawn certllieateshold on 
behalf of residents In the United King- 
dom should be lodged between th* hours 
of 11 a.m. and 2 p.m. ISatordays «» 
ceotedl for payment through *« Author- 
ised Depositary In London with LAZARD 


ALL CHILDREN WHO 
DEVELOP THIS DISEASE 
depend for their lives on 
daily insulin injections. They 
have— 


MIDDLE EAST 

If you are seeking business in . 
this area in .Building, 
Construction. Electrical, 
Technical Equipment and 
Supplies, contact: 
Garbett International 
18 Wigmore Street. W1 
Tel: 01-580 5816 - Telex: 24637 


DIABETES 

Join t« — Help us 
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COMPANY NOTICES 


BRITISH DIABETIC 
ASSOCIATION 


10 Queen Anne Street 
London WIH OBD 


ANNOUNCEMENT 


As from 6 July 1982 a new firm 
JAQUES & LEWIS 
OF GRAY’S INN 
will succeed to the practices of 
JAQUES & CO. and 
- LEWIS, LEWIS & CO- 


Financial Times Monday July 5 1982 

OVERSEAS NEWS 


Gulf oil producers seek 
African price increase 


BY RAY DAFTER, ENERGY EDITOR 


AN OFF-DUTY Civil Guard 
died yesterday and a second 
was severely injured when a 
booby trap nail bomb blew up 
their car near Pamplona. 

The attack was in apparent 
reprisal for the wounding of 
four members of the Eta 
Basque separatist organisation 
who were allegedly accidently 
shot by a Civil Guardsman 
when a prison van Transporting 
them suffered a road accident 
on Friday. 

The bomb incident in the 
village of Bursuete, close to 
the French frontier, came in 
the midst of a police alert in 
the Basque country following 
the kidnapping on Saturday of 
a prominent Bilbao business- 
men by suspected Eta members. 

Sr Rafael Abaitua, a com- 
pany director, was taken by six 
i hooded gunmen from his family 
summer residence of Zarauz 
after persuading his abductors 
to kidnap him in place of bis 
| 7S-y ear-old father. Sr Javier 
1 Abaitua. 

Sr Javier Abaitna, a former 
trustee of the Bilbao Bourse 
and a leading broker both at 
Madrid and the Bilbao stock 
exchanges, was the original 
victim 

The Burguete bombing 
brought the number who have 
died in political violence in the 
Basqup country this year to 23. 

In San Sebastian protesters 
erected barricades and clashed 
with police <on Saturday night 
in a demonstration following 
the funeral of a local Eta man 
who was killed in crossfire 
during the assassination last 
Wednesday of a Bilbao police 
chief. 


SAUDI ARABIA and other Gulf 
oil producers are expected to 
press African exporters to raise 
the price of their high-quality 
crudes by at least $1-50 a barrel 
when ministers of the Organisa- 
tion of Petroleum. Exporting 
Countries (Opec) meet itt 
Vienna later this week. 

The Saudis, the world’s lead- 
ing oil exporters, want Libya. 
Algeria and Nigeria to increase 
their prices from the present 
level of about £35.50 a barrel to 
at least S37. according to the 
Middle East Economic Survey. 

Gulf producers arc thought to 
be concerned that the Africans 
are not charging a hieh enough 
premium above the Opec 
reference level — *34 a barrel — 
to reflect the quality of erodes 
and their relative nearness to 
the main Importing markets. 

According to the survey, the 


Saadis argue that market condi- 
tions would support a premium 
of at least S3 a barrel over the 
reference price. 

Nigeria and Libya are expected 
to resist the pricing pressure 

when the ministers meet for 
their emergency talks on Friday. 

Nigeria, in particular, is 
anxious 1o boost exports to ease 
its serious financial plight It 
will also emphasise that one of 
its main competitors among 
the exnorters of high quality oil 
— the UK— is charging even less. 

The Opec price differential 
was reduced to Its present level 
at an emergency Ministerial 
meeting last .March. That deci- 
sion helped. African exporters 
to increase their sales, partly 
at the expense of Gulf pro- 
ducers. 

The survey reported yester- 
day that officials in Gulf 


countries estimated total opec 
output had risen to. about IS.. 1m 
barrels a day. about lm b/d 
above the present ceiling agreed 
by all Opec members except 
Iran. 

The Gulf officials are said to 
be angry that some members, 
such as Iran, are discountin’’ 
prices to push up sales. 

Saudi pressure for an African 
price rise will be viewed by 
some industry analysts as a 
sign that the oil market may 
he slowly returnini; to a more 
balanced position. 

It was Saudi Arabia thn* 
stepped in just over three 
months ago to support Niqeri.i 
against pressures for price cuts. 
The Saudis and other producers 
threatened to cancel contract 
if importers failed to buy 
adequate /mounts of otl from 
Nigeria. 


Link between Belgian 
and Luxembourg 
francs scrutinised 


BY PETER MONTAGNON, EUROMARKETS CORRESPONDENT 


LUXEMBOURG and Belgium 
resume discussions today on the 
future shape of the economic 
union that has linked their two 
currencies over the past 60 
years. The talks come amid 
fresh denials of an imminent 
end to the parity between the 
Luxerabs^r? and Belgian francs. 

Speculation that this link 
could be severed bas been 
mounting in Luxembourg's 
financial markets since last 
month's devaluation of the 
French franc which also in- 
volved a revaluation of the 
D-mark against the Belgian 
franc in the European Monetary 
System. 


Exchange risk 


Belgian residents have been 
flocking to buy Luxembourg 
franc denominate/ bonds, while 
Luxembourg banks, who are 
short of opportunities to lend in 
their own currency, have shown 
great interest in a rare LuxFr 
2bn Eurocredit for the French 
small business finance concern 
Caisse d’Eouipement des 
Petites et Moyennes Entre- 
prises. 

Banks in the Grand Duchy 
have an excess of Luxembourg 
francs which they are forced 
to lend in Belgium. This in- 
volves no exchange risk as long 
as the parity between the two 
currencies remains. It could 
involve losses, however, in the 
event of an appreciation of the 
Lnxpmbourg franc against the 
Belgian unit. 

This is one of the Problems 
wbirh will be covered *n today’s, 
folks, according to Mr Ernest 
Munition. State Secrets rv at the 
Luv®mboiirP ’ Finenc** Ministry. 

” There is absolutely no 
question of - a break with 


Belgium at this stage." said Mr 
Muehlen, “but we do have the 
theoretical right to alter the 
parity of our currency and we 
want to establish how this right 
could be made to work in 
practice." 

This involves settling two 
main problems — quantifying 
Luxembourg's share of Bel- 
gium’s foreign exchange 
reserves and coping with the 
exchange loses that would be 
incurred by Luxembourg banks 
on their lending to Belgium. 

“We want to see what would 
happen on these points . if we 
were to dedde to sever the 
link,” Mr Huehten said. “It 
doesn't mean that we want a 
break, but in the case of adjust- 
ment (in the EMS) we reserve 
the right to take a decision in 
our own interests.” 



Mr Werner. . . . Staked 
political credibility on over- 
haul of currency link 


Economic des 


Bankers in Luxembourg point 
out that the Grand Duchy has 
close economic ties with .West 
Germany as well as Belgium. Its 
economy is more prosperous 
than that of Belgium and it 
makes a positive contribution to 
the Belgo-Luxembourg balance 
of payments. 

They also fear the Luxem- 
bourg franc woald be laid wide 
open to speculative currency 
flows following any break in 
die parity Hnk with the Belgian 
currency. 

Giles Merritt adds from Brus- 
sels: Luxembourg’s determina- 
tion to win what will be at the 
very least a thorough review of 
its monetary partnership with 
Belgium owes. as much to poli- 
tics as it does to economics. 

For it was the Belgian Gov- 
ernment's unilateral decision 


last February to devalue its 
franc by 8.5 per cent without 
reference to the i/uxembouri: 
authorities that triggered the 
Grand Duchy's discontent. 

Belgian experts are also 
sceptical that an independent 
Luxembourg franc enuid be 
viable. But in political circles 
it is recognised that the Grand 
Duchy can no longer he treated 
as a silent partner in the two 
countries' monetary union. 

The coalition Government led 
by Luxembourg's Mr Pierre 
Werner, who will lead the 
Grand Duchy's delegation to to- 
day’s Brussels talks, has in 
recent months staked much of 
its political credibility on a 
promise to overhaul the cur- 
rency link. 

There are nevertheless double 
in Brussels banking circles over 
the feasibility of meeting some 
of Luxembourg’s demands. The 
independent valuation of the 
Grand Duchy's assets, tradition- 
ally held by the Rnnque 
Nation ale de Belgique, is a par- 
ticularly complex accounting 
exercise. 


FINANCIAL TIMES, publ.^ted A*:-. 
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March 1982 was posted w 
and loan neck holders on JHi . Jute 1982. 

Th* annual Bonoral inert no Is to 
MMd at 12 noon on Wednesday. 28th Johr. 
1932 at the Hotel Inter- Continental. 
Hamilton Place. London WJ. 

By Order Or tne Board. 

I. M. F. BALFOUR. 


THE TOR INVESTMENT TRUST. PLC 


Warrants (the “Warrants”) in registered and 
bearer form to subscribe for Ordinary Shares 
ofHK$6 each (the“ Shares”) in fee capital of 
Jardine, Matheson &Co., limited 


NOTICE IS HEREBY GIVEN that the 
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will bo CLOSED from 16tfi to 28tft July 
19B2 Iwctastee- . . . _ _ 

By Order of the Board. _ 

J. TOOO. Secretary. 



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shares held as at29th May, 19S2. the subscription price of the 
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FINANCIAL TIMES 

PUBLISHED IN LONDON & FRANKFURT 


^ ^This adjusted subscription price is retroactive from 30th May, 


JARDINE MATHESON (FINANCE) LIMITED 

Jardine. Matheson & Co., Timing 
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Hong Kong, 1st July, 1982. 


LEFEVRE GALLERY. 30. BrirtonSL, W1 
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Whrt toteffigTita: OHM. TffitohMffi 759M. EMorM; FtafonHw 71-81. Tdtc 425052. 
T sl ffi* — ■ 79W 157. 



INTERNATIONAL A BRITISH EDITORIAL & ADVERTISEMENT OFFICES 

Espreoccdi 32, fitafrtt J. Teh <41 6772. 




EDUCATIONAL 


SIR WINSTON CHURCHILL. Exhibition 
of Paintings. Wayne Gallery. 17. Old 
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nqoesL 


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In seven months trading in 1978, our investors each 
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during a time when the markets were depressed, we 
maintained our performance, providing profits for our clien ts 
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for the pastfouryears of9125%. 

The mini m um investment is £2,000. And our account 
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- If all this soundsimpressive, you may wish to know 
more. In which Case, complete the coupon now. 


Please send me a copy ofyonr brodmkt 'Managed Speculative Accbunta i 
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Securities & 


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.1; L • 


hfw 

i i * 















Financial Times Monday July 3 1982 


OVERSEAS NEWS 


3 


Warsaw to Papandreou boosts economic team 



presents new 
to 


increase 


BY VICTOR WALKER IN ATHENS 



BY TONY HAWKINS IN HARARE 


THE POLITICAL future of Mr 
Joshua Nkomo and his minority 
Zapu party is in doubt this week 
following Prime Minister 
Robert Mugabe’s weekend state- 
ment linking Mr Nkomo with 
last month's abortive attack on 
the Prime Minister's residence. 

Speaking at a weekend news 
conference marking the end of a 
48-hour visit of Zimbabwe by 
Mr Francisco Pinto Baisaraao, 
the Portuguese Premier, Mr 
Mugabe said it was clear that 
Zapu had been responsible for 
the attack. 

" Zapu was responsible, there- 
fore the inference can be drawn 
that Nkomo was responsible," 
the Prime Minister said. 

Mr Nkomo, who was to have 
addressed a “ unity and recon • 
dilation" rally in Harare 
yesterday, has again denied that 
he or his party have been plot- 
ting against the Government. 

The 3.000 people attending 
the rally were told that Mr 
Nkomo had flu and had been 
Cfttfined to bed. But a party 
official at the Zapu leader's 
Bulawayo home denied Mr 
Nkomo was ill and said he was 
at a meeting m the city. He 
gave no reason for the failure 
to address the Harare rally. 

The Prime Minister, asked 
whether Mr Nkomo faced 
arrest, replied: “ Whether 
Nkomo had a direct hand in the 
attack will he established by the 
police." 

The Zapu leader has been 
under threat of arrest ever 
since his dismissal from the 
coalition Cabinet in Ferbuary 
wrben secret arms caches were 
discovered in parts of Mata* 
beleland, Mr Nkomo’s regional 
political base. 

Three very senior members 
of Zapu — its organising secre- 
tary and its two top military 
figures — have been detained, 
without trial, on suspicion of 
involvement in what the rival 
Zanu-PF party says was a 
military plot to oust Mr Mugabe. 

The Prime Minister has said 
Mr Nkomo could face prosecu- 
tion depending nn the outcome 
of police inquiries into the arms 
cache affair. 

This latent threat against Mr 
Nkomo follows the June 24 
attack by gunmen on the homes 
of Mr Mugabe and his Minister 
of National Supplies, Mr Enos 
N'kala. 

The attacks were unsuccess- 
ful but one of the gunmen, sub- 



Xkomom . . . railed to address 

rally 

sequent!}’ identified as a 
sergeant in the national army 
and a former member of Mr 
Nkomo s Zipra army, was killed. 

Police say eight other former 
Zipra soldiers have been 
arrested along with an unspeci- 
fied number of civilians. 

Mr Nkomo's speech in yester- 
day’s rally was read for him 
by Mr Joseph Msika. the 
secretary-general of Zapu. He 
strongly denied any Involve- 
ment’ in the attacks. 

Mr Nkomo has been under 
increasing criticism because of 
the outbreak of violence in 
Matabeletand in western 
Zimbabwe m which more than 
30 people have died. T*ie 
government has blamed former 
Zipra “ dissidents " for the 
incidents. 

Although Mr Nkomo has con- 
demned the violence and the 
attacks on Mr Mugabe, it seems 
clear that the ruling Zanu-PF 
party believes the present situa- 
tion provides an opportunity to 
end the Zapu leader's political 
career. 

Mr Mugabe is committed lo 
the - constitutional” establish- 
ment of a one-party state in 
Zimbabwe. While opposition 
has crumbled with the split in 
Mr Ian Smith’s Republican 
Front. 

Mr Smith's recent illness sug- 
gests that ’ the ' 63-year-old 
former prime minister will him- 
self soon leave politics 


lowest wages 

By Christopher Bobinski in 
Warsaw 

THE POLISH Government 
plans In raise welfare bene- 
fits and l he wages of Hie 
lowest paid workers. It afsn 
plans (o give pensioners a one- 
off payment in the coming 
months to compensate for l his 
year’s rise in tiic cost of liv- 
ing. 

No figures have been 
released and the move coin- 
cides with today's increases 
in the prices of coffee and 
tea. The price of certain 
brands of rodka is to he 
increased by 40 per cent and 
it will now be sold outside the 
rationing system. 

The additional payments 
are designed to cushion the 
effects of an estimated 40 per 
cent drop in real wages since 
drastic price increases last 
February and head off social 
discontent. 

In act implicit criticism nf 
the move the country’s Bank- 
ing Council, an institution 
set up last year in oversee 
financial policy, has warned 
(hat any increase in wages 
unaccompanied by a growth in 
supplies of consumer goods 
-will merely strengthen infla- 
tionary processes and dis- 
organise the market.” 


Sihanouk plans 
Kampuchea HQ 

By Our Foreign Staff 
PRINCE Norodom Sihanouk, 
president of the newly- 
formed Coaiitjon Government 
nf Democratic Kampuchea, 
arrived in Thailand yesterday 
on the last stop of his lour 
of the five members of the 
Association of Southeast 
Asian Nations. 

He said he plans to cross 
the border iuto Kampuchea 
this week to set up secret 
headquarters from which to 
wage war against the Viet- 
namese. 


Dominican leader dies 
in shooting 'accident' 

DOMINICAN President 
Antonio Guzman died yester- 
day after a shooting incident 
described by the country’s 
Defence Minister as acciden- 
tal. Reuter reports 
Mr Guzman, who did not 
run for re-election this year, 
met bis son-in-law and an 
aide at his office late on 
Saturday. The President left 
the office, walked Into an 
adjacent toilet and a single 
shot was heard 


A NEW 50-member Socialist 
Cabinet will be sworn in today 
in Greece following -a sweeping 
reshuffle which Premier 
Andreas Papandreou carried out 
on Saturday aimed 2 t strength- 
en ins- the' Government's eco- 
nomic team. 

The reshuffle, eight-and-a-half 
months alter Dr Papandreou’s 
Panhellenic Socialist Movement 
tPasok) came to power, brings 
into the Cabinet for the first 
lime four men who until Satur- 
day were at the head of Greece's 
largest state-controlled banks. 

The governor of the Bank of 
Greece. Mr Gerassiraos Arsenis, 
rakes over the newly-created 
Ministry of National Economy, 
which replaces the Ministry of 
Co-ordination and now incor- 
porates the sectors of industry 
and foreign trade. 

Mr Arsenis will be assisted by 
an alternate Minister and three 
undersecretaries, one of them 
Mr Constantine Vaitsos, until 
Saturday president of the Com- 
mercial Bank of Greece. 

The governor or the main in- 
vestment bank, the Hellenic 


Industrial Development Bank. 
Mr Dimitrious Koulourianos, be- 
comes Finance Minister in place 
of Mr Ammenual Drettakis, who 
resigned just over a week ago in 
a dispute over a new property 
tax. 

The fourth change affecting 
the banks is the transfer from 
governor of the National Bank 
of Greece to Justice Minister 
of Mr George Alexander 
Mangfiakis, a leading Greek 
lawyer. 

The only replacement so far 
announced in the banks is the 
appointment of the secretary 

genera] of the National Tourist 
Organisation. Mr Stelios Pana- 
sopoulos, as governor of the. 
National Bank of Greece, the 
country’s largest commercial 
bank. 

Mr Arsenis. Mr Koulourianos 
and Mr Vaitsos all had wide 
experience abroad, mainly with 
the United Nations, the OECD 
and the World Bank, before 
their appointment last Novem- 
ber to banking positions. 

The reshuffle brings in 17 
newcomers to a Cabinet in- 


creased in size from 41 in the 
previous setup- The new 
Cabinet consists of 23 Ministers 
and 26 under-secretaries, with 
two positions' of under-secre- 
taries still to be filled. Six 
Ministers and eight under-secre- 
taries are not Members of 
Parliament. 

The nine members dropped 
from the Cabinet include.' the 
former Co-ord Ration Minister, 
Mr Apostolos Lazaris. architect 
of the Socialist Government’s 
economic policy both before 
and since the October elections. 

The other two Ministers not 
given posts in the new Cabinet, 
apart from Mr Drettakis, are 
former Justice Minister. Mr 
Stathts Alexandria and former 
Industry and Energy Minister. 
Mr Anastasios Peponis. Among 
the five . -under secretaries 
dropped is Mr George Petsos, 
former deputy to Dr Papan- 
dreou at the Ministry of 
National Defence. 

Dr Papandreou retains the 
National Defence Ministry, 
assisted by two under secre- 
taries. 

Twenty-two members of the 


new Cabinet also retained their, 
posts, including the Foreign. 
Minister, Mr Yannis Haralam- 
bopoulos, and his three under 
secretaries, and the Culture and 
Sciences Minister, Mrs Melina 
Mercouri. . . 

The former Industry and 
Energy Ministry is .turned into 
the Ministry of Energy and 
Natural Resources, .while the 
Social Services Ministry, is split 
into separate Ministries of 
Health-- and. Welfare and Of 
Social-’ Insurance. A new 
Ministry created _:is that 'of 
research and technology. . 

Dr Papandreou *as also set 
up. a new undersecretariat for 
Greeks abroad, to be beaded by 
Mr Asimakis Fotilas, the former 
Foreign Undersecretary dis- 
missed last January for failing 
to consult tbe Government 
before countersigning an EEC 
communique concerning Poland. 

According 1 to the Government 
.spokesman, . Mr . Dimi trios 
Maroudas,.who retains, his post 
as undersecretary forPress and 
Information, the ■ reshuffle 
should 'not be seen as sign ailing 
a change in economic policy. 


Argentine army chief orders 
inquiry into Falklands war 


BY JIMMY BURNS IN BUENOS AIRES 


GENERAL Cnstino Nicola ides, 
who look over as Argentina's 
army chief following the 
removal of General Leopolddo 
Galneri in a bloodless palace 
coup last month, has ordered ■ 
a major inquiry into the 
military conduct of the 
Falklands war. 

Similar initiatives are under- 
way within the navy and the 
air force following instructions 
given by the two surviving 
service chiefs Admiral Jorge 
Anaya and Brigadier General 
Emilio Larai Dozo. 

In a weekend speech, Gen. 
Nicolaides said: ” For the sake 
of historic truth I am deter- 
mined to establish heroic acts, 
and the faults and errors 
committeed during the war.” 

During a review of troops in 
southern .Argentina. Gen. 
Nicolaides also pledged the 
army's full backing for 
President Reynaldo Bignone's 
efforts in return Argentina to 
democracy by 19S4 and to press 
the country’s claims over the 
Falklands. 

Gen. Nicolaides did not 
mention further military action 


but stressed that the return of 
the islands to Argentine hands 
would be a major priority of 
foreign policy. 

The inquiries ordered by the 
service chiefs are aimed at 
keeping what has recently 
become a subject for public 
debate within the strict confines 
nf military discipline. 

Full details of the army 
inquiry have not been revealed, 
however it is likely to focus on 
the actual military campaign 
rather than the events leading 
up to the April 2 invasion. 

Initial investigations are 
already being carried out by a 
branch of army intelligence 
based in Campo de Mayo, one 
of the main barracks in the 
suburbs of Buenjjs Aires. 

Witnesses will eventually 
include soldiers of all ranks, 
ranging from conscripts who 
fought in the Falklands to high- 
ranking officers who conducted 
operations from the mainland. 

Formal cross-examination of 
senior officers including Gen. 
Mario Benjamin Menendez. the 
former military governor of the 


Falklands. is expected to take 
place before a “ tribunal of 
honour” led by generals not 
directly involved In the war. 

The tribunal will give 'the 
accused an opportunity to clear 
their names. However, it will 
have to decide whether to refer 
a senior officer to a Council of 
War for a formal court martiaL 

The inquiry is expected to 
enter a formal stage when Gen. 
.Menendez and some 500 officers, 
currently detained by the 
British in the Falklands, are 
returned to Argentina. 

Public criticism of the Falk- 
lands campaign has been stirred 
by eye-witness accounts from 
returning conscripts. 

They have complained about 
pjoor equipment, a lack of 
adequate fod supplies, and in 
some cases, cowardly and often 
corrupt leadership. 

Military sensitivity to such 
allegations was demonstrated 
over the weekend when army 
Chiefs of Staff called a press 
conference to deny the allega- 
tions. Journalists were shown 
exhibits of clothing and rifles 
used during the campaign. 


U.S. envoy in 
Moscow TV 
peace plan 

MOSCOW— The U.S. Ambas- 
sador to Moscow last night 
assured millions of Soviet tele- 
vision viewers that the U.S. 
sought a frank and open dia- 
logue with the Soviet Union in 
the search for world peace. 

In a July 4 U.S. Independence 
Day address, broadcast at peak 
viewing time on Moscow TV, 
Mr Arthur Hartman said the 
U.S. would like to improve, its 
relations, with the Soviet Union 
but , added: “We must . say 
frankly that this can not depend 
only on us ” ' 

Mr Hartman’s .four-minute 
address in the main, Soviet TV 
news programme followed a 
coolly-worded Independence 
Day message 'from President 
Leonid Brezhnev to President 
Reagan. 

Mr Brezhnev, who - left Mos- 
cow yesterday for his tradi- 
tional summer holiday in the 
Crimea, simply asked Mr 
Reagan to • extend to the 
American : people ‘‘ congratula- 
tions and wishes of peace ” on 
their 'national holiday: ■ 

Reuter 


Botha to 
meet Zulu 
leader over 
land row 

By Bernard Simon in Johannesburg 

MR P. W. BOTHA, the South 
' African ■ Prime Minister, has 
proposed a meeting with 
Chief Gatsha Buthelezi, the 
‘ Zulu leader, . to discuss 
Pretoria’s controversial plan 
to cede part of the Zulu tribal 
“homeland” to. Swaziland. 
Chief Buthelezi told a politi- 
cal meeting over the week- 
end. 

He did not say when the meet- 
ing with Mr Botha would 
take place. 

There Is no indication yet that 
the South African Govern- 
ment is willing to back down 
on the land deal which 
involves the transfer of 
about 3.000 square miles of 
South African territory to 
Swaziland. The land is the 
Jngwavuma district in nor- 
■ them . Natal, part of . the 
Quazulu “ homeland.” and the 
whole of the Kaugwane 
Bantustan in the eastern 

Transvaal. 

The proposals have sparked off 
angry protests over a broad 
cross-section of South African 
opinion, especially she coun- 
try’s 6m Zulus. Chief Buthe- 
lezi said that if violence 
erupted in the Ingwavuma 
area be would do nothing to 
stop it. 

Businessmen in Natal have 
warned that growing anta- 
gonism between the South 
African Government and 
.Zulu leaders over the land 
issue may harm labour rela- 
tions. A spokesman for the 
Natal Chamber of Industries 
' said the dispute could “ pre- 
cipitate on unhappy and 
costly element of destabilisa- 
tion in the workforce.” 

The mining industry has also 
voiced its concern over the 
future of mineral rights held 
in the areas to be ceded. All 
mineral rights in Swaziland 
are vested In the king. 
Speculation that the Swazi 
Government will establish 
closer political relations with 
Pretoria in - return for the 
land has been heightened by 
a Sunday newspaper report 
that Mr .Piet Koornhof, the 
South African Minister for 
Black Affairs, offered the 
deputy Prime Ministership of 
Swaziland . to Kang wane’s 
. chief . minister Mr Enos 

Mafcnwa. 

According to Mr Mabuza, Dr 
Koornhom also offered him 
the post of South Africa’s first 
ambassador to Swaziland, Mr 
Mabuza said he turned down 
both proposals. 


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Financial Times Monday July 5 1982 


WORLD TRADE NEWS 


•>*' l 

it; 


Paul Cheeseright reviews the new export credit rates for OECD nations 

U.S. overcomes EEC resistance 


BRITISH BANKS and major 
users of fixed-tenn export 
finance will ^ week be told 
by the Export Credits Guaran- 
tee Department of new rates 
and conditions for the funding 
of project and capital goods 
business. 

This follows the winding 
down of the protracted negotia- 
tions in the international export 
credits Consensus or. more 
formally, the Arrangement on 
Guidelines for Officially Sup- 
ported Export Credit — the 22- 
nation agreement under the 
aegis of the Organisation for 
Economic Co-operation and De- 
velopment. 

Although minor points remain 
to be sorted out. the main lines 
nf lending conditions to last 
From this week until May. 1983. 
have been established. It now 
seems unlikely that any single 
nation would wish to torpedo 

the whole arrangement with 

farther objections. But nothing 
is absolutely certain. 

The new Concensus shows 
substantial changes on its pre- 
decessor. which' ran Formally 
from last November until the 
middle of la?t May. but which 
was extended largely to permit 
negotiation on EEC qualifica- 
tions to a plan sponsored by 
Mr Axel Wallen, the Swedish 
chairman of the OECD export 
credit group. 

Interest rates: Largely on 



EXPORT CREDITS CONSENSUS 

New Interest Rate: 

Crates prevailing Nov El-May 82 in brackets! 


Borrowing 

country 

Criteria 

Length of loan 
(years) 

2-5 

Over 5 

Maximum credit 
term (years) 

Minimum cash 
payment (%) 

Category l 
Relatively rich 

GNP per capita 
£4,050 (1979) 

12.15(11) 

123(1135) 

S* 

IS 

Category 2 

Middle income 

Not in 

categories 1 or 3 

10-85(103) 

1135(11) 

85 

15 

Category 3 
Relatively poor 

GNP per capita 
under S624( 1978) 

10 (10) 

10 (10) 

10 

IS 

* 8.5 yean exceptionally 






U.S. insistence and in the face 
of a stubborn EEC resistance, 
rates for Category 1 and Cate- 
gory 2 borrowers have been 
increased by between 0.35 and 
1.15 psreentage points. 

On the face of it. this is a 
minor increase, although it 
brings Consensus rates some- 
what more closely into line with 
market rates for long-term 
funds on most of the major 
western markets, while leaving 
borrowing costs for the poorest 
countries untouched. 

But the real effect is more 
marked because of changes 
made among the categories of 
borrowers. 

Reclassification: The Con- 
sensus nations have adopted 
new objective criteria to use in 
giving borrowing countries a 
category rating. The impact is 


significant in both political and 
economic terms. 

First, countries tike the 
Soviet Union have been moved 
from Category" 2 to Category 1. 
This means that the Soviet 
Union, instead of having to pay 
10,5-11 per cent on the basis 
nf the Consensus rates obtain- 
ing for the past six months, 
will now have to pay at a rate 
1.4-1.65 percentage points more 
over a shorter credit period. 
Its now rate is some 4.5 per- 
centage points higher than it 
has been paying on credits for 
the Siberia-West Europe gas 
pipeline equipment. 

This goes some way towards 
meeting U.S. policy of forcing 
European lenders to the Soviet 
Union to abandon excessive 
concessional financing. 

Second, the countries which 


receive a large part of the 
fixed-terra expo'rt finance under 
Consensus arrangements have 
been lifted from Category 3 to 
Category 2. This includes 

nations like Algeria. Brazil. 
South Korea. Malaysia. Mexico. 
Nigeria and Taiwan — mainly 
rbe newly industrialising 
countries. 

Japan: As a low-interest 
country. Japan did not want to 
grant export credits at the 
Consensus minimum rates, but 
at its long-term prime rate of 
8.4 per cent. Hitherto it has 
been lending at a minimum 
9.25 per cent. 

The new arrangement pro- 
vides for a Japanese export 
credit — usually a mix cf official 
and private lending — to be no 
less than 0.3 of a percentage 
point above the long-term prime 


rate. Japan is thus placing a 
surcharge an a whole credit 
package. 

Mixed credits: These are a 
mixture of export credits at 
Consensus rates and aid funds 
carrying very low or no interest, 
thus lowering net charges to the 
borxov/er. Previously there was 
a system of notification for their 
use. but it has been agreed that 
they will not be used where the 
grant element is less than 20 
per cent of the total financial 
package. 

Prior commitments; The 
effect of interest rate changes 
in previous Consensus agree- 
ments has often been reduced 
by the making of commitments 
on credit terms in advance of 
rate increases. This practice is 
being brought more closely 
under control by agreement 
that prior commitments can 
only last for six months, after 
which the rates obtaining at 
the time of expiry would apply. 

Discipline: The Consensus is 
a gentleman’s agreement, not 
a binding treaty. When credits 
have been zranted in the past 
which breach the minimum 
interest rates or extend the 
maturity period beyond the 
maximum, competitors have 
been informed so they can 
match the offer. Under the new 
system it has been agreed that 
there will be no breaches of this 
type- 


Panama Canal users face 9.5% increase in tolls 


BY DAVID GARDNER IN PANAMA CITY 


USERS of the Panama Canal 
face higher tolls from October 
1. the beginning of the water- 
way’s fiscal year. 

The increase, likely to be 9.8 
per cent, is lower than the 
25-30 per cent rises mooted last 
year. 

Panama Canal Commission 
officials say the rise is needed 
to offset the loss in revenue — 


estimated at S55m-60m a year 
—when the new Trans- 
Panamanian oil pipeline comes 
on stream in September. The 
last toll increase, of 29.3 per 
cent, came in October 1979, 
with the signing of the Panama 
Canal Treaties and went 
largely towards covering in- 
creased payments to Panama 
for the use of tbe waterway. 
The new rise will only be the 


fourth since the canal opened 
in 1914. 

Laden vessels will have to 
pay $1.83 per displaced ton 
against the previous toll of 
SI. 67, while ship: in ballast 
will have to pay $1.46. against 
the previous SI. 33. This is 
expected tn yield extra 
revenue of 82.25m a month, 
according to Sr Fernando Man- 
fredo. the commission's deputy 


administrator. 

The commission expect to 
lose S4.8m a month when the 
oil traffic from Alaska’s north 
slope starts using the new pipe- 
line at its full capacity of 
600,000 barrels a day. It hopes 
to make up the difference 
through economies and through 
the extra capacity the loss of 
oil tanker traffic will give the 
canal. 


Canal revenues have risen 
some 8 per cent in the October 
1981-May 19S2 period to S2 15.3m 
against S200.6m for the same 
eight months of the previous 
fiscal year. The Canal commis- 
sion. which as a U.S. appro- 
priated fund agency is re- 
quired to break even, made a 
small operating loss in fiscal 
1981 on turnover of S303m. 


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UK group 
in $73m 
Indonesia 
port deal 

By Richard Cowper In Jakarta 

BALFOUR BEATTY of the 
UK has won another major 
construction contract in 
Indonesia, underlining its 
role as one of the successful 
British engineering and con- 
struction companies operat- 
ing In south-east Asia's big- 
gest nation. 

An Ang lo-Canadian Joint 
venture which combines 
Balfour Beatty, and Dominion 
Bridge of Toronto has been 
awarded' a *73m contract to 
Traild a coal port for the 
Indonesian Government in 
South Sumatra- The port Is 
one segment of a S2bn scheme 
to boost electricity output on 
Java by usin’? coal from the 
nearby island of Sumatra. 

It Is th<* third Indonesian 
Government contract that 
Balfour Beatty has won this 
year. In May the company 
won a contract to carry ont 
civil engineering. works 
wni-th £80m on a 
£200tn hydroelectric project, 
la February the com pan v was 
awarded a letter of intent 
with the French construction 
company of C.G.E. Alsthom 
for the erection of a high 
voltage transmission line. On 
Java the contract was worth 
around £33ra to the Anglo- 
French Joint ventwre- 

Construction of the port, 
which will initially he 
designed to handle 2.5m 
tonnes a year, is due to be 
completed by September, 
1984. and should come into 
operation in early 1986. 
Financing for the prolect will 
be ronehlv 70 ner cent in the 
form of esuort credits from 
the UK and Canada, and 30 
per cent from the Indonesian 
Government. Canada will 
snpuly C$47.4m and Britain 
£8.6m. 



SHIPPING REPORT 

Rates for dry 
cargo stay low 

By Andrew Fisher, 

Shipping ‘Correspondent 

THE ROCK-BOTTOM rates in 
world dry cargo markets show 
no signs of rising to profit- 
able levels for some time, 
according to leading ship- 
broking companies. 

Feamleys. based In Oslo, • 
said in its latest market 
review that the further col- 
lapse of the market in June 
would Foree owners to lay up 
more ships. 

“ The prospects for any 
increase in demand are as 
remote as ever," it noted. 
Cats in steel production for 
the third quarter in Japan and 
Europe would only worsen the 
situation. 

“ There are no signals from 
the U.S. that interest rates 
will fall and we fear that the 
latent investment potential in 
Europe may thus be stUI 
further deferred. " 

Last mouth saw a sharp 
drop in the rate for 70,000. 
tons of grain from the UJS. 
Gulf to continental Europe 
from 510 to 56.50 a ton. Coal 
rates from Hampton Roads on 
the U.S. east coast to Japan 
dropped from S19 to 514.50. 

While rates remain depres- 
sed. still more bulk carriers 
ordered when prospects 
looked rosier are streaming 
onto the market Around 7m 
dwt or bulk carriers were 
delivered hi the first half. 


S. Africa awards 
coal allocations 
to foreign units 


BY BStMARD SIMON IN JOHANNESBURG 

COAL MINING subsidiaries . of 
four European oil companies 
are among at least 30 groups 
whidi have been awarded 
quotas for the fourth phase of 
South Africa's coal export pro- 
gramme. 

'Hie Government notified the 
companies last week of their 
allocations, which will raise 
South African coal exports 
from around 48m tons in the 
mid-1980s to 73m tons in the 
early 1990s. The eventual target 
of phase four Is 80m tons, mak- 
ing South Africa the world's 
third largest coal exporter after 
tile U;S. and Australia. 

The oil companies receiving 
quotas are BP, Shell and Total, 
a subsidiary of Compagnie 
Francaise . des Petroles of 
France. Each' will be allowed to 
export an extra 0.5m tous a 
year. BP and Shell already have 
annual export quotas of 5.5m 
tons, and Total has an alloca- 
tion of 2.5m tons a year. 

For the first time a quota 
has been' given to Agip Coal, 
a subsidiary of ENI, the Italian 
state enetgy utility. At 2m .tons, 
it is among the largest of the 
phase four allocations. 


Agip Coal is a partner in 
an open cast mine in the 
eastern Transvaal and is under- 
stood to own substantial coal 
reserves in the area. 

Nonetheless, the large alloca- 
tion to ENI is bound to raist- 
speculation that the group 15 
involved in supplying oil to 
South Africa. The Government 
has said that the size of export 
allocations depends heavily on 
a company's contribution to 
South Africa’s energy needs. 

An official for Agip Coals- 
local subsidiary said at the'' 
weekend that the quota; 
appeared to be based on th£. 
contribution which its mine 
will make to regional devetop : 
meat and the assurance of .r 
secure export market in Italy.. 

The largest phase four 
quotas have gone to the coal 
mining subsidiaries of South. 1 
Africa’s two biggest mining; 
houses. Anglo American Cor- 
poration and General Minins. 
Union Corporation. Gencor com- 
panies have been awarded ar 
additional 4.5m tons a year, and 
Anglo American 4m tons. 

Transvaal Consolidated Lands, 
part of the Barlow Rand group ‘ 
has an allocation of 2.5m ton-: 


China seeks Investment to 
develop energy resources 


BY COUNA MscDOUGALL 

CHJNA is looking to Europe for 
major technology and invest- 
ment for ' a : $6bn, 15-year 
development scheme for its 
coal and transport industries, 
Mr Li Lu, General Manager of 
the China Southwest Energy 
Resources United Development 
Corporation, said on Friday. 

Chinese officials say the 
amount of foreign investment 
involved is likely to be large, 
though not yet decided. 

A mission from the energy 
corporation, led by Mr Kong 
Xun, board chairman, outlined 
plans to British businessmen at 
the start of a two week visit 

The mission’s purpose is to 
discuss energy development in 
the southwest and coal develop- 
ment throughout China, The. 
Chinese - stressed that plans 
were still at a preliminary 
stage, but possible means of 
financing will be discussed with 
6 major British hanks during 
the visit - 

Mr Kong said “ We can assure 
everybody here that problems 
affecting China’s imports in the 
first stage of _our economic re- 
adjustment are now ended. " 

The Chinese mission has al- 
ready visited Italy, West Ger- 
many, Spain, France .and 


Belgium. The Chinese wer 
optimistic about prospects o 
.financial and technical co-opcra 
tion with these countries on lb* 
southwest China developmen 
project 

A Hong Kong company, the 
United Development Corpora- 
tion. has played a big part in 
smoothing the way to agreement 
over the past two years by set- 
ting up discussions with com- 
panies in Europe. 

The southwest development 
plan covers fonr provinces and 
includes coal mining, rail con- 
struction, port expansion (at 
Zhanjiang, the designated coal 
port) and the establishment of 
power stations. 

Current output of 7m tonnes 
of good quality coal is to be 
boosted to 15m tonnes under the 
plan, Mr LI Lu. deputy leader of 
-the mission, said. Zbanjiang’s 
capacity will be raised to handle 
ships of 150.000 tonnes to carry 
coal to western Europe. .' 

During its visit, the mission 
also wants to discuss nationwide 
coal exploitation. This includes 
a new 4m tonne annual capacity' 
mine in Hebei province, a 3m 
tonne mine in Shandoft? pro- 
vince and a 4m tonne mine in 

S haron. 


World Economic Indicators 


RETAIL PRICES 

<ms=i«n 


% change 
over 
previous 
year 


UK 

May *82 
238.9 

Apr *82 

Apr *82 
2373 

Mar *82 

Mar *82 
232-6 

Feb *82 

May *81 
2183 

Apr *81 

93 

W Germany 

1343 

133.9 

133.7 

128.0 

53 

France 

205.6 

2033 

201 JO 

1803 

73.3 

Italy 

226.4 

2833 

2813 

247.0 

16.0 

Netherlands 

T5T3 

1ST.? 

149.7 

1423 

63 

Belgium 

T56J) 

", 154.1 

153.9 

1419 

83 

US. 

• 1753 

17SJ0 

T75.8 

1653 

6.1 


Mar *82 

Feb *82 

Jan *82 

Mar 81 


japan 

1463 

1463 

1463 

1423 

2.9 




Source (except UK); 

Eurostat 



The Shape of 
Things to Come 

World Population is Increasing 
by one Million Every Five Days! 

It took from the beginning of time until the year 1830 
for the population of the world to reach one thousand 
million, the second thousand million was added in 
lOOyears, the third in 30, the fourth in 15. 

As for the future, only a nuclear war or plague could 
now prevent the population of the world reaching 
six thousand million by toe year 2000. 

Six thousand million people all needing food, 
shatter; clean water, work, education, medical care 
aswell as a decent environment to live in. 
in Kenya alone toe number of hospitals must 
increase by astaggering 547 percent to provide 
adequate health care by the year 2000. And in Mexico, 
India and Egypt for example food production will need 
to more than double to keep pace with population growth. 

These are the factefacingthe worid.They are graphically 
illustrated in The Shape of Things to Gome' It is essential 

reading. What happens after the year 2000 will depend of course 

on what wedo today- lost time can never be made upi 

Read the facts. Send 
for yonr ropy Ibdaf 


To: Population Concern, 27/35 Mortimer Street, London WIN 7R1 
Please send — .copy/ies of The Shape of Things to Corne k 


j(£ 1.75 per copy) 


I enclose £ 

I also enclose a donation of £_ 

Na""i 


and would life mare information 
about Population Concern. 

a 




Pas- ati?nC*r, M m orpwHaliOflun-fc'^hBauitsrwof the Family p^rtninj 

.-.jc-c.rttr-fq^terrrJCher.ryiyi 25ni37)ardracCT^n*. r.-sr,*., 

i«BisRHi*aaiHBBiHH!aicrs ! Er:™rr”' 


(Please Print} 



e < wefe throustaut tne world. 

5 -‘ 




y 














































Financial Times Monday 1 July *5 1982 


UK NEWS 


Austin Rover seeks cut-price parts 



BY KENNETH <S** OIMS . MOTOR INDUSTRYCORRESPONDENT 

BL'S JJ2S* fowe WiU have been reduced 

... anrnmn from 104,000 at the end of 1977 

to about 47,500 by mid^Tuly. 
Recent closures have included 
the Speke No. 1 plant in March 
this year and the Rover saloon 
plant , at Solihull in April. The 
Coventry Engines factory shut 
down on Friday. 

Productivity In BL now 
matches the best In continental 
car plants, according to Mr 
Harold Miisgrove, chairman. 

All Austin Rover has left to. 
look at when seeking farther 
cuds are the components which 
make up 70 per cent of the cost 
of its cars. 

Earlier this year Austin Rover 
said it could buy from overseas 
70 per cent of the materials and 
components it needs at an aver- 
age of 20 per cent below British 
prices. 


oat their ^ snppuers 

cannot c 2?f ly * company 
■will buy “ton. overseas. 

aris es ..mr ecuy xrom the car 
nuufeting battle in the UK. The 
noest-severely competitive con- 
g*™* * or many years have 
down car prices and 
manufacturers have had to 
„gpcn ct milli ons of pounds to 
.support their dealers. 

Austin Rover is- determined 
not to be diverted from its 
■ fina ncial targets which involve 
"Tea*mg even at trading profit 
level next year and pre-tax 
level, in 1984. 

The company claims it tiag 
Sone as. far as possible to cut 
Jts overhead costs. The work- 


in other words, only 30 per 
■cent of its UK suppliers were 
competitive with their overseas 
rivals. 

Austin Rover has been witl- 
ing to accept this differential 
because it does' not want to 
destroy the UK components sec- 
tor for short-term gain. 

But tile British public no 
longer seems willing to accept 
the cost penalties involved in 
buying TJK-built . vehicles, 
mainly because of publicity 
about low car prices on the Con- 
tinent. 

How tough Austin Rover has 
to be in the autumn wfU depend 
considerably on new car sales 
in August' and September — the 
peak months for. registrations. 

If the total market fails to re- 
cover, or if BL's market share 
remains below expectations, the 


company will be faced with 
some tough decisions. 

Austin Rover estimates new 
car sales will be below 1.45m, 
compared with the 1-5 2m fore- 
cast In January, and its market 
share is under 18 per cent 
against the 21 per cent aimed 
for in 1982. 

BL claims tbat 95 per cent 
of its materials and components 
are bought in Britain but it has 
no formal “buy British' 1 
policy. 

Mr Mus grove recently sent a 
letter to company car fleet 
buyers urging them to buy 
British “where it makes sense 

commercially. 7 * 

He could argue That any 
switch by Austin Rover to over- 
seas suppliers would take place 
because buying in Britain, no 
longer made commercial sense. 


Falklands inquiry terms likely this week 


BY PETER RIDDELL, POLITICAL EDITOR 


THE FULL terms of reference, 
and the membership, of the 
inquiry into the origins of the 
Falklands crisis should be 
known by the end of the week, 
after further consultations 
between Mrs Margaret Thatcher 
and other political leaders in 
the next couple of days. 

The Prime Minister wQl see 
Mr Michael Foot, the Labour 
Parly leader, today to seek all- 
party agreement on whether 
the focus of the inquiry should 
be primarily on the events 
immediately before the Argen- 
tinian invasion of the islands 


in April, or -whether it should 
look back to the mid-1980s. 
Also, there will be discussion 
on whether the inquiry should 
he established by parliament 
or by the Government alone, 
and on its membership. 

Officials » Whitehall believe 
that the areas of difference are 
being trimmed but the con- 
troversy has been inflamed' by 
the intervention of Mr Edward 
Heath and Mr James Callaghan, 
former Prime Ministers, They 
have questioned Mrs Thatcher's 
desire that the inquiry have 
access to the papers of previous 
administrations, and should 


look beyond events immedi- 
ately before the invasion. 

The Involvement of the two 
former Prime Ministers could 
slightly delay the announce- 
ment of the inquiry. 

Over the weekend. Sir Harold 
Willson, another former Prime 
Minister, promised support , for 
the inquiry. He said it was “ the 
duly of anyone with any know- 
ledge to contribute to it As 
a matter of fact, there was very 
little activity on that front 
during my term of office, but 
I will look through aH the 
papers and make -them avail- 
able.” 


Dr David Owen of the Social 
Democratic Party said at the 
weekend that Mrs Thatcher 
should have asked the views- of 
funner Prime Ministers of 
right, not just as a matter of 
courtesy. He also said tile auth- 
ority of parliament should be 
obtained for such an inquiry. 

Dr Owen, who was Foreign 
Secretary in the Labour govern- 
ment which set up the Bingham 
inquiry into infringement of 
sanctions against Rhodesia, said 
he had been advised that that 
inquiry' could not be shown 
Cabinet papers of' earlier 
administrations as of right. ' 


Merchant fleet calls for built-in defences 


BY ANDREW FISHER, SHOVING CORRESPONDENT 


THE General Council of 
British Shipping; (GCBS), 
representing UK companies, 
will press the Government in 
the wake of the Falklands crisis 
to promote construction of 
merchant ships with built-in 
defence features. 

The Government has 
promised to review the position 
of the merchant fleet in a 
defence context after calling up 
50 vessels from owners to 
accompany the task force to 
the Falklands. 

The GGBS will make dear 


during this review its concern 
about the continued decline of 
the British flag fleet and express 
its disappointment with the 
latest Defence White Paper. 

None of the points which it 
has made to the Government 
in the past 18 months— such as 
tiie merchant's fleet’s fall and 
its likely future defence role — 
were mentioned in the White 
Paper. 

One feature the GGBS would 
Jflre to see installed on certain 
merchant ships is anti-missile 
equipment. Canard's Atlantic 


Conveyor container ship might 
not have been hit df She had 
been installed with this. 

More tankers should be 
equipped with facilities for re- 
fuelling at sea (RAS). Tankers 
which were -RAS-equipped 
proved essential to the task 
force and were needed from the 
start of the crisis. 

Ships with these and other 
features could be built mainly 
with the industry’s own money, 
hot with some help from the 
Government, the GOBS reckons. 
It win also renew its pleas, so 


far ignored, for allowances to 
stimulate UK ship-owners to 
invest in new cargo Vessels and 
thus prevent a further decline 
, of the fleet, down since 1975 by 
two-fifths to 29m deadweight 
tons. 

Other defence features which 
new ships could possess include 
strengthened decks for Harriers 
and helicopters, and lifts 
enabling aircraft to be parked 
below the main deck. Container 
ships would be developed also 
to allow aircraft to take off 
from special decks. 


Chemical 
Bank 
expands 
in Europe 

By Dominie Lawson 
CHEMICAL BANK of the 
UJ5. hqs announced measures 
to expand Its' European 
activities. 

Its 12 European branches 
and offices win report to a 
new European headquarters 
in London rather than direct 
to New York as previously. 
Mr William Harrison, senior 
vice-president and previously 
general manager of the 
London branch; will head this 
European division. 

The London operations divi- 
sion is to be transferred to 
Cardiff, where business is due 
to start later this year. 

In West Germany a newly- 
incorporated bank, Chemical 
Bank AG, has taken over most 
of the corporate and inter- 
bank business of the bank’s 
German branch, reinforcing 
its position in the hanking 
wholesale market 
In Spain, Chemical Bank is 
to . open a branch in 
Barcelona. Its Madrid branch 
opened two years ago. The 
two branches will be directly 
connected for computer 

processing which. says. 
Chemical Bank, may well be 
the prototype for a number 
of similar branches in Europe 
and elsewhere. 

The bank plans to open an 
office of its leasing subsidiary, 
Cheroco, in Madrid. It will be 
the first entirely .- forelgn- 
owneti ' leasing company in 
Spain. 


National parks 
‘disasters’ 

LARGE ABEAS of Britain’s 
national parks “ should cause 
ns great shame as monuments 
to disastrously bad land use,” 
leading conservationist Mr 
John Andrews, national con- 
servation officer of the Royal 
Society for the Protection of 
Birds, claims in Footloose, 
the outdoors activity maga- 
zine. 

He appealed for an end to 
the 50-year war between con- 
servationists and forestry 
interests. 

“It seems to be high time 
for both sides to take stock 
of the situation and consider 
what advantages might come 
from a more, con structiv e 
relationship,” be said. 


Legislation on way 
to split GLC and LT 

BY HAZEL DUFFY. TRANSPORT CORRESPONDS^ 


THE Government is expected 
to introduce in the next parlia- 
mentary session a short Bill to 
take London Transport (LT) 
out of the control of the 
Greater London Council (GLC). 

There - has been no formal 
indication by Mr David Howell, 
the. Transport Secretary, to the 
GLC of this intention, although 
several of his recent state- 
ments on transport have shown 
that he is thinking in that way. 
The official position is that Mr 
Howell is still ' awaiting a 
» reasonable ” plan from the 
GLC on LT. He does not see 
comment on the four options 
put forward two weeks ago by 
Mr Ken Livingstone, Leader of 
the GLC, as part of the Depart- 
ment's role. 

The removal of LT from the 
GLC would ' involve simple 
legislation because the London 
Transport Executive would be 
able to continue to run LT. 
The much more complex legisla- 
tion which, would: abolish the 
GLC Is a possibility, but would 
involve other changes in local 
government It is not likely to 
be introduced at least until the 
next parliamentary session, or 
perhaps for inclusion in the 
Tory manifesto for the next 
General Election. 

The next meeting of the GLC 
transport committee, on July 
14, will consider detailed plans 


for the 1933 and 19S4 Transport 
Policies Programme (TPP) of 
the GLC, covering all transport 
for which the council is respon- 
sible. This plan incudes such 
' public transport options as a 
strict interpretation of the Law 
Lords’ ruling against the cheap 
fares policy of the GLC, and the 
Council’s Fares Fair policy. 
After the meeting, it will go out 
for consultation with all the 
other interested local authori- 
ties and other bodies. By the 
au tumn , the GLC will decide on 
the formal TPP to be submitted 
to the Department of Transport. 

Mr Howell is believed to take 
the view that -recent events in 
transport in the capital dictate 
that some other form of control 
of LT is becoming increasingly 
urgent. He is expected to 
await the publication of the re- 
port on LT by the Select Com- 
mittee on Transport before he 
goes ahead. 

One possibility is that LT will 
return to Departmental control 
temporarily, while plans are 
drawn up for a transport 
authority which would be re- 
sponsible for the planning and 
supply of transport in London 
and the southeast on the basis 
of contracts with LT and British 
Rail. That would enable the 
move towards greater integra- 
tion, on matters such as fares, 
between LT and BR. 


Merchant banks manage 
less pension fund assets 


BY EMC SHORT 

MERCHANT BANKS are losing 
a significant share of the in- 
vestment . ' management of 
pension fund assets to other 
financial institutions. But they 
still look after the majority of 
pension fund investments. 

This is one major conclusion 
from the latest annual survey of 
pension fund investments made 
hy a leading firm of consultant 
actuaries. Bacon and Woodrow. 
Over 200 pension schemes with 
segregated funds — funds with 
direct investment holdings — 
hire contributed data to the 
survey. 

It shows that, at the end of 


1974 merchant banks looked 
after the funds of 71 per cent of 
pension schemes. Seven years 
later, at the end of 1981. this 
proportion had fallen to 52 per 
cent 

Stockbrokers Increased their 
share of the pension fund in- 
vestment market from 16 to 21 
per cent, while the share of 
clearing banks rose only 
marginally from 6 to 7 per cent, 

But the biggest inroad into 
the dominant position of 
merchant banks was made by 
other financial institutions, 
whose share expanded from 7 
to 20 per cent 


Renewed 
unrest 
in EMS 

forecast 


i 


By David Marsh . 

THE PERIOD of calm in the 
European Monetary System 
(EMS), following last months 
devaluation of the French irane, 
la not likely to last long, accord- 
ing to two reports on the 
currency stabilisation scheme 
'hist published in London. 

They predict a fresh bout of 
unrest leading to more prmuun 
for devaluation around the 
turn of the year. 

Lloyds Bank, in its J ntp r- 
national Financial Outlook pub- 
lication, says pressures may now 
focus on the lira which was 
devalued by a smaller rate than 
the franc <in the June realign- 
ment. , , . 

The Italian currency could be 
a candidate for a bigger devalua- 
tion early next year. vrcth the 
D Mark and the Guilder likely 
to be revalued. 

Lloyds says, however, that if 
the D-mark continues to be 
weak against the dollar, or re- 
covers only modestly, the need 
for further EMS changes will be 
limited. „ 

Stockbrokers Simon and 
Coates in their monthly bulletin 
on financial prospects say that 
the realignment and economic 
polio' changes in France last 
month would have no more .than 
a temporary effect in stabilising 
the currency scheme. 

Over the short term of around 
three months, the firm says It 
expects pressure to break out on 
the Belgium franc and Irish 
punt In the longer term— six- 
nine months— the French franc 
will again be in trouble. 

The stockbrokers say that ihc 
Paris Government's new 
austerity package may not be 
effective in producing a lasting - 
fall in inflation. 

Super-bugs eat 
farm waste 

NEW BREEDS of super-buss 
are on the loose in the farm- 
yards, tackling .some of agricul- 
tural's thorniest problems — 
how to get rid of waste and 
smells. 

Two products based on the 
super-bugs were announced at 
tiie Royal Show, whidi opened 
at Stoneleigh yesterday. 

One contains millions of the 
specially bred micro-organisms 
which literally eat their w.iy 
through waste, and eliminate 
smell. 


Textile industry’s profits 
forecast to rise 20% 


BY MARK WEBSTER 

THE TEXTILE industry should 
see profits rise about 20 per 
cent this year and a real im- 
provement in profitability dur- 
ing 1983, according to stock- 
brokers Phillips and Drew in 
its review of the industry out 
today. 

It says 1981' saw the first 
signs of a recovery in profits 
Coartaulds* profits rose from 
£5m to £50m while the eight 
other largest textile companies 
showed total pre-tax profits 
increases of some 45 per cent 
The improvement in profits 
this year will stem more from 
the industry’s drastic reorgani- 
sation than from any market 
upturn but 1983 promises good 
growth in UK consumption of 
textile goods and improvements 
overseas. 

The UK industry’s production 
dropped 10 per cent in 1981, 


taking the total fall over two 
years to nearly 30 per cent 
The main problem has been 
Import competition. Phillips 
and Drew estimates that textile 
and clothing imports rose 8 or 
9 per cent in volume terms 
while exports fell by more than 
15 per cent 


Police hunt for 
fraud couple 

A NATIONWIDE police hunt is 
under way for a smartly dressed 
man of about 50, his female 
accomplice and the woman's two 
children who all stay at the 
best hotels and guest houses, 
amassing huge bills. 

Then they leave without pay- 
ing — or settle with a stolen 
cheque. 


Growth forecasts average 1.2% this, year and 2.3% in 1983 

Max Wilkinson reviews an FT analysis of 15 predictions for economy 


Which 

national newspaper 
has readers who 
opened 

t 650,000 building 
society accounts 
in the last year? 


AN FT analysis of 15 forecasts 
for the UK economy, all made 
since the last Budget, show a 
dose consensus about the 
prospects for- growth, inflation 
and unemployment this year 
and next 

The average prediction for 
growth in output this year is 
3-2 per cent; and afl but two 
of the forecasts come within 
half a percentage point of tins 
figure. One extreme is rep- 
resented by the Cambridge 
Economic Policy Group’s base 
projection, which suggests a 
Slight decline this year. On the 
other, the Liverpool group, 
which, baa been consistently 
more optimistic than others, 
expects rapidly accelerating 
growth from the second h a3f 
of this year. 

If these two forecasts are 
excluded, the rest are within 
about one percentage point of 
the average prediction of 2.3 
per cent for growth in 1983. 
However, the National Institute 
of Economic and Social Re- 
search, which has tended to- 
wards pessimism about hkefly 
demand in the economy, sug- 
gests growth at only half the 
average rate in the FT analysis. 

This average should, how- 
ever, be regarded . as only a 
general consensus figure, partly 
because of the margin, of error 
inherent in these forecasts, and 
partly because different assump- 
tions are made by different 
groups. 

The Treasury, for example, 
estimates that the average error 
in predicting the growth in out- 
put has been one percentage 
point in the past, which is of the 
same order as the total growth 
expected this year. 

The Treasury's own predic- 
tion of 3-5 per cent growth this 
year was made at the time of 
the last Budget — before the 
recent rise in the dollar and 


strengthening of U.S. interest 
rates. The Treasury’s latest, un- 
published, forecast is more 
pessimistic and probably puts 
growth for this year at about 1 
per cent 

The influence of different 
assumptions can -be seen in a 
comparison of the predictions 


ties, shown np by this com- 
parison of forecasts, is about 
the trend of exports and im- 
ports. Gaps in Last year's 
figures and new methods of 
collecting statistics have made 
the tre nds very difficult to 
interpret. 

All the forecasters agree that 
a substantial increase in im- 


made by the London Business “ ^ tZTZrZ Ha"? 

^ P 01 * 5 0811 expected, reflect- 

Scbool and the National loath ^ ^ m import 

penetration as well as the 
moderate recovery of .eco no m i c 


tute. The National Institute’s 
forecast is made on the baas 
of “unchanged policies.” This 
contributes to its prediction of 
very sluggish grow* for 1983. 
However,., the business school 
assumes mildly ex pansi onary 
measures in the next and sub- 
sequent Budgets. 

At the more optimistic 
extreme, the Liverpool Univer- 
sity' group continues to believe 
that tight monetary policies will 
create a circle of rapidly- 
falling inflation and high 
growth, with a consequently 
reduced need for government 
borrowing. 

In contrast with this mone- 
tarist view, the Cambridge 
Economic Policy Group at tire 
university's Department of 
Applied Economics is pessi- 
mistic, in its base case, about 
the performance of exports 
relative to imports. Because of 
the weak competitiveness of UK 
industry, even a 3 per cent 
revival of consumer spending 
would not lead to a growth of 
output 

However, this group has also 
made a prediction on the 
assumption of a spontaneous, 
export-led recovery. This shows 
growth could be 1.5 per cent 
this year and 2.5 per cent next 
year. However, the group shows 
-little optimism that this will 
happen. 

One of the major uncertain- 


activity. For next year there 
is general agreement that 
exports should pick up by about 
4 per cent in response to a 
revival of world trade. 

However, the expectations 
about export performance this 
year are more disparate. Some 
forecasters, predict almost no 
improvement while others take 
the Treasury view that' an 
improvement of 3.5 per .cent 
to 4 per cent can be expected. 

A comparison of the ' FT 


average of the forecast with one 
compiled at the end of last year 
shows substantially greater 
optimism about inflation, now 
expected to fall to a little under 
9 per cent by the end of this 
year compared with the 10.3 per 
cent animal rate predicted in 
December. 

This FT average is a little 
higher than it might be because 
no allowance is made for the 
fact that some forecasts are for 
an average annual rate. 


The average prediction now 
for public sector borrowing this 
year Is about fS^bn, which is 
£3bn less than the average ex- 
pected in December. 

The average prediction of 
adult unemployment of 3m by 
the end of this year is about 
the same as It was in the last 
survey of forecasts. 

Most groups continue to pre- 
dict a worsening unemployment 
trend, except for the Liverpool 
group which predicts a substan- 
tial fall' in the jobless to 2.5m 
next year. 


Percentage change 
year on year 
In 1975 prices 
unless otherwise stated 


THE UK ECONOMY: COMPARISON OF FORECASTS 
Exports Imports 


Grass 

domestic 

product 


Consumer 

spending 


Retail 

price 
Inflation 
(year end) 


1982 1983 1982 1983 1982 1983 1982 1983 1982 1983 


Unemploy- 

ment 

(adults) 

fourth 

quarter 

m 


Balance 

of 

payments; 

current 

account 

£bn 


Public 

sector 

borrowing 

requirement 

£bn 


Treasury 

(MaO 

1-5 

1.9 

OS 

. os 

3 S 

35 

95 

35 

9.0 

75 

__ 


40 

35 

95 


IMF 

(April) 

(Mar) 

0* 

■fjO 

U 

7.1 

OS 

0.2 

03 

33 


TOT 


10-2 




47 






London Business .School 

(Jim) 

TjO 

. ^s 

06 

1 3 

OA 

41 

85 

5.4 

73 

75 

3JD 

3.7 

OLE 

22 

8e£ 

29~ 

7.9 

si” 

95 

Confederation of British 

Industry 

<W) 

0.9 

25 

■ 0j& 

1 A 

0 A 

45 

44 

55 

85 

48 

23 

35 

3J> 

13 

8.7 

95 

Cambridge Economic Policy Group 

(April) 

-04 

04 

-03 

10 

-IS 

-06 

5A 

40 

85 

42 

3.1 

3 A 





Economist Intelligence Unit (May) 

1 3 

23 

06 

IS 

42 

35 

95 

48 

10.1 

106 

248 

35 

35 

27 

“92 

95“ 

Liverpool university 

(June) 

25 

47 


— 

— 

— 

— 

— 

74 

43 

25 

25 

5.1 

35 

8.6 

3.9 

Cambridge Econometrics 

(June) 

IS 

35 

-03 

2 S 

48 

55 

55 

9.9 

700 

85 

32 

3a 

45 

0 

_ 


Phillips & Drew 

(July) 

CJulvl 

\A 

Q.9 

2.4 

. 0.1 
0,3 

IS 

LB 

35 

44 

5.1 

75 

7 5~ 

2.9 

3J> 

_25_ 

07 

__9 A 

*5L 

Laing & Cruickshank 

(July) 

1j6 

. 2JJ 

0J0 

1 A 

3.T 

43 

65 

5 A 

8 A 

95 

3.1 

29 

3a 

20 

33 

—08 

03 

85 

85 

7.5 

93 

Stmihnd Hall 

(April) 

IS 

3h. 

-04 

2.7 

— 

— ■ 

. — 

■ — 

— 

— 

2.9 

29 

40 

__ . 


mmm 

James Capri 

(June) 

OS 

2.0 

-03 

07 

41 

49 

9j0 

93 

85 

85 

2.95 

3.05 

3.1 

15 

85 

— 

CapeJ-Cure Myers - 

(July) 

— 

1 s 

04 

IS 

05 

35 

45 

40 

85 

8JD 

3.2 

33 

35 

15 

105 

95~ 

Average 

NOILS; 


IS 

23 

0.1 

25 

23 

41 

75 

. 41 

U 

73 

35 

21 

33 

2.1" 

os' 

9.0 


Retail prices: IHF._^National Institute; CEPG average for year. Capet- Cure Myers second half of year. 
Unemployment: . CEPG. Liverpool, Cambridge Econometrics, annual average. 

Treasury: 1983 forecasts all first half compared with first half of 1982. -PSBR is first half at annual rate? 


She’s blind. So how does 
she know it isn’t catfood? 


Anyone can tell a wooden spoon from 
a tablespoon by its feel, but when you’re a 
blind woman making steafc-ancHtidney 
pie, how can you pick up the right tin - 
when catfood, peaches and baked beans 
all fee/ Just the same? 

We provide the answer. The RN1B 
makes special self-adhesive labels that 
take braille embossing, so thatthe Mind 
housewife can read what she's got in her 


cupboard. A little thing, reaHy-but quite a 
big help in the kitchen. 

Ifs one of over400 special items sold 
by the RN1B - at subsidised prices which 
are made possible only by the money 
people give us. 

The whole of ourwork Is devoted to 
helping bfind people-men, women.childrerr- ^ 
in a proctrea/ way. We askyou now for a 
donation, large or small, to help us do this. 




1 wish to help the work you do tor Wind people, and so I send this personal donation. *1 

Please ttekhere only if receipt required LJ I 

UvM Jrcnjflco - “ 


Mr/Mre/Mlss. 
Address 


H For Information .on making a Covenant, tick here 0 

I mention the RNIB in your wiH. wibimmmmnm 

i sssssasa" FOR THE BUND , iW _ 

Lhibmb224 GREAT PORTLAND STREET, LONDON WIN6AAhmhmJ 



Private housebuilding recovery 
falters but optimism remains 


BY ANDREW TAYLOR 

THE RECOVERY in private 
housing starts has lost a little 
of its momentum since the first 
quarter of this year, according 
to the latest state of inquiry 
by the House-Builders’ Federa- 
tion pubtished today. 

However, Mar Roger Humber, 
federation - director, says: 
“ Housebuilding activity has 
settled down at a higher level 
than at any time .during the 
last two years." 

Replies from 500 builders 
producing about 60 per cent of 
new bouses in England and 
Wales showed that 47 per cent 
of builders expect to make 
starts on more homes this year. 
In the first quarter about 87 
per cent were forecasting a 
higher level of starts. 


Larger companies remain 
more optimistic than their 
smaller- and medium-sized 
rivals. About 87 per cent of 
larger companies expect to in- 
crease housing starts .this year 
and 25. per cent of them expect 
to hold starts at. 1981 -levels. 

Slower irate of 
recovery expected; 

What appears to have hap- 
pened is that builders which 
pushed ahead with housing 
starts in the early pert of the 
year gre expecting a slower rate 
of recovery during the rest of 


The federation says, how- 
ever, that starts this year wiH' 
be well above last year’s 316,000. 


Recent forecasts by building 
industry bodies and trade 
associations suggest housing 
starts this year may rise to 
between 130,000 and 135,000. 
This would be a substantial 
improvement on the low levels 
of 1980 and 1981 but below the 

144.000 made in 1979 and 

157.000 in 1978. 

The federation says building 
activity may increase in the 
autumn , if there is a farther 
reduction in mortgage interest 
rates- 

It says that 12 per cent of 
companies reported delays in 
arranging mortgage finance, re- 
flecting the high demand for 
mortgages. In spite of this, the 
mortgage, situation is generally 
healthy, says the federation. 


INTERNATIONAL BIDDING 

CENTRALSUL — CENTRAL DE 
CO-OPERATIVAS DE PRODU- 
TORES RURAIS DO RIO 
GRANDE DO SUL LTDA-. is 
looking for manufacturers of 
machines and equipment 
destined for the production of 
fertiliser, to Implant an in- 
dustrial plant located in Rio 
Grande— RS. 

The Interest ad manufacturers 
may write to: 

Rui General Andrade Neves 

CEP. 30.000. Cabo Postal 2&?4 
Brazil 


BUILDING 
SOCIETY RATES 

Every Saturday the 
Financial Thnes 
publishes a tabic 
_ . Riving details of 
Building Society Rates 
bn offer 
to the public 
For further details 
please ring: 

01*248 8000 
Ext. 3G06 




Financial Times Monday July 5 1982 


I I I 1U 


UK NEWS 


Privatisation plan Treasury In 

■ ^ , lone stand 

tor Telecom on council 

likely this month *Sl mg 


Coal Board’s bleak vision carries threat of closures 

VEflEEfttt Sne Cameron examines prospects for the industry 


SIR ARTHUR SCARGELL, presi- 
dent of the National Union of 
Mtneworkers, is not expected to 


Coal Board’s latest state-of-the- senous review. 


BY GUY DE JONQUIERE5 

THE GOVERNMENT is ex- long-delayed plan to raise as 
pected to announce plans this much as £150m through the 
month to turn British Telecom sale of Buz by Bonds. The bond 
into a public limited company, issue, which will probably be 
as the first step towards the in two chunks, is expected to 
eventual sale of shares in the take place early next year. 


On council' lay much stress (m\h?Nationai are uneconomic and under Wh“ 

I Coal Board’s latest state-of-the- “ senous review." The briefing ongmaBy agreed by 

cn^nrlinrr industry briefing document document gives details of the ment, 

spenamg when the union's conference size and the cost of the problem. NCB, it xras eimsaged 

r ° opens in Inverness today. After a throat-clearing "how- roal demm^ wtmldl 

By Robin Pauley I The document is slim— onlv ever." a “ for example and * at tonnes by I9B5. It wai 

™S™«2' 1 £.«C8 [2JT&SMS tfpg Despite its tactful 

against Mr Michael Hesel- : SS flSm^^SerS which language and deni 


■ dramatic upsurge in coal 
In 1 he 1981-82 financial year, demand or a substantial relexa- 


The briefing originally agreed by govern- UK coal sales were 117m tonnes, taon of government financial 


! opens in Inverness today. After a throat-dMrtng "how- cod idm-na i wcmm * . m m 

f The document is slim-onlv ever." a “for example and “ at tonnes by 1985. It was also ex- mud the same hi 1985. 

1 21 pages plus a few appendices’, the present time" it finally While demand to 


admits baldly: "Some 12 per DeS pite its tactful 

against Mr Michael Hesel- I fixated ^tiS^St^en the obtained ftSm^^SerS which language and denial of a 
{STJ52T5?JSSE ! board and the NUM ewtntire «P---W_-5-*5 “ hit-list” of pits, the . 


which prevail eLsewhere in tne 
EEC." 

But in the absence of these— 


grow at the rate forecast, the none is likely — the altema- 
capadty dosed mnce 1978-74 has Uve must be m increase in the 
totalled only 8.391m tonnes. This ^Qgyre rate of uneconomic pits, 
averages out at a mere lm _ . 

Tonnes a year between a third The briefing document rs not 


organisation 

vestors. 


private 


The Government has still to 
deal with objections from the 


The necessary authority will Post Office Engineering Union, 
be sought in broad enabling which represents most of Tele- 
legislation, likely to be intro- corn's staff and continues to 
duced in the aut umn it is also oppose any plans for the sale 
expected to include provisions of equity to private. investors, 
to set up a new body to regu- Attempts are being made to 
late the telecommunications persuade the union that private 
market. investment in Telecom would 


A committee of ministers 
chaired by Mrs Thatcher has 
become so bored with the 


bleak situation facing the UK production, running at just l1Tlftrft1 
coal industry- it shows bow under 110m tonnes a year. ■. 

far the hi eh hones embodied To stem its losses end reduce Capacity, 
in IOTA Plan for Toal have dependence on government 


to uneconomic mining t^SSSSSTS^ has tetw£n supply and demand 


continued apace. 


stresses that “exports can only 


assistssiJs 2sssu m *£srz = .aaagiaa 

Leon Brittan, Chief deSTtelh?t^tfS lSguage and determined it should do over 1985, a broad avera^ of “ some on gov^aent san^ since tewing mS thTn^ 
Secretary to the Treasury, the strenuous denial that the the next few years— the NCB 3m and 4m tonnes of rapacity a 2£if£2L5 Ith Jf draiaf^otrt a St- 

that it cut the debate short NCB has a “bit-list” of pits to needs to close some 13m tonnes year was l ikely to be tost, l^of closures, 

recentiy and told them to fight ! be dosed. It underlines the need of capacity, much of it in mainly through mines becoming achieve an overall breakeven hstot closures 


The Government has not. °P en the way to further expan- 
however, derided on a firm and job opportunities, by 
timetable for selling shares in freeing the organisation from 
Telecom which, with net assets financial restrictions imposed by 
of £8bn. would be the biggest the Government, 
nationalised industry offered to Establishment of a regulatory 
investors. But the likelihood body to ensure fair competition 
of a sale during this Parlia- is regarded in Whitehall as an 
ment appears to be diminishing, essential consequence of less 
Passage of the legislation is direct government control over 
likely to take several months Telecom. Although the exact 
and more time would be needed powers such a body should be 
to make practical arrangements given are under discussion, they 
for a share sale. Ministers would be likely to include 
recognise that investors could supervision of telecommunica- 
be reluctant to support an issue tions tariffs and the terms on 
less than a year before the next which inter-connection was 
General Election, which must granted between Telecom's net- 
be held by the spring of 1984. work and such competing 
Some indication of investors' systems as Mercury, the planned 
sentiment may emerge when network of independent busi- 
Telecom goes ahead with its ness communications. 

NEDC to study review 
paper on economic outlook 

BY ALAN PIKE, INDUSTRIAL CORRESPONDENT 

MINISTERS and both sides of growth. 

industry will have an oppor- The foundation for the 
tuirity for a wide-ranging debate will be provided by a 
examination of economic pros- paper from the National 
pects when the National Economic Development Office. 

Economic Development Coun- which traces the progress of 
cil (NEDC) meets on Wednes- the economy through the later 
day. stages of the recession and 

The main item on the agenda looks at prospects. It has be- 
is the review of the macro- come apparent, says this report, 
economic situation, which the that the battle to defeat infla- 
council conducts annually. Dis- lion has taken longer, and been 
mission is certain to range at a greater cost in output and 
across such topics as pay levels, employment, than was originally 
unemployment and output envisaged 

Call for copyright reform 

BY ALAN PIKE, INDUSTRIAL CORRESPONDENT 

COPYRIGHT LAWS covering protected from “slavish copy- 
industrial design and the copy- mg." There could, however, be 
ing of documents need to be no objection to the ** copying to 


it out elsewhere. 

Mr Brittan has proposed 
successively that the penalty 
for overspending should be 
grant cuts of £500m. £2 00m 
and £100m, all of which were 
rejected. Ministers accepted 
Mr Heseltine’s argument that 
any penalty would have to be 
applied to all authorities 
including underspenders. 

Ministers had promised 
that no council planning to 
spend less than the Govern- 
ment's assessment of the 
amount needed to provide a 
standard level of services 
would be penalised, and that 
no penalties would be applied 
differentially once the finan- 
cial year had started. Coun- 
cils wQl be unable to make 
up the loss by levying a 
supplementary rate once the 
Local Government Finance 


tor an end to uneconomic South Wales and Scotland, 
mining caparitv. Only a dramatic u ptur n in 

Mr Norman Siddall. the new coal demand and a oorrespond- 


year" was UkS to bTtosC wewsary in 1981/82 to regulation denial about a Mt- 

mainly through mtiw* becoming achieve an overall breakeven h»t of closure®, 

exhausted. result” But the harsh facts and 

The plan was designed to pro- The NUM refees to this break- figures it contains point inevit- 
ride around 40m tonnes of new even result in the report of tts ably in the direction of farther 

and replacement capacity by national, executive committee closures — closures that Mr 

the mid-1980s. and comments "It Is hard to see Scargfil has sworn to oppose. 


a ss " * prices muw ch “ 5e gjgg w ggrgg^ 

NCB may hive off stocks businessman’s diary 


to private investors 


BUSINESSMAN’S DIARY 

UK TRADE FAIRS AND EXHIBITIONS 


Date Title Venue 

BY RAY DAFTER, ENERGY EDITOR July 5^ Royal Show (0203 555100) Kenilworth 

'pot? \-iTTnvii rftai -Rnarrf Rut th* NCR reeards onlv July 6-8 Integrated Energy Exhibition (0272 572 624) Bristol Exhibition Centre 

. 5 SS? »f. Alexandra Palace 

market for coal in a bid to minimum requirement for JuIy 13 . 15 Environmental Engineering Today International 

reduce its heavy stock financing strategic purposes. Therefore, Exhibition and Symposium— SEECO (0763 

costs. it is looking at ways of finding 73209) Wembley Conference Centre 

The scheme, being devised in private investors for a propor- July 13 . 18 The Royal Tournament (01-371 8141) Earls Court 

consultation with the Treasury, tion of file 14m tonnes balance, jyjy 14.31 International Dental Exhibition— EXPODENT 

would involve the hiving-off to rh e ncb said yesterday that, (01-885 8200) Olympia _ 

private investors of some of the whatever scheme was devised. July 18-22 Harrogate Gift Fair (0282 867153) Exhibition Centre, Harrogate 

NCB’s stocks, now running at wou m -—..t.. the July 2630 World Congress and Exhibition tor Ultrasound m _ „ _ . _ 

a near-record level. Various to MmT^av as at Medicine and Biology (01-486 6582) Met Exbn Hall, Brighton 

... Pits in tne same way as ai c 10 /aijk; o«m Olvmma 




statute books 
Mr Brittan has come up 


are being considered by the 
NCB and merchant bank B 


iLZOZ d at about number of banks what the Sept- 5-i2......... International Air Show (01-839 3231) Farnborough 

t \J^j2£ a TSS? d yJL’$X effect would be of e. future. Sept 7-10 l*M . , tu^Uo*, , Merkms »d MeotttoSoo 


laranteea. Au& 3^ Motorcycle Show (01-385 1200) Earls Court 

“ We are examining with a Sept. 5-8 International Hardware Trades Fair (01-643 8040) Olympia 


councils 


24m tonnes. They have built 


« ! ““ WU “ TO - r“2'" ““i; market for coal " it said. Industry Exhibition— LABELEX (01-467 7728) NEC, Birmingham 

always less than the amount | up as a result of depressed market tor coai. it s^. Sept 7-10 International Carpet Fair (021-705 6707) ,. Harrogate 

councils chum at the start of demand and maintained output As we see it, a trank or 14 . 16 Goji winding International *82 (0202 891339) Wembley 

vAflr TKic w ap fivAr. IpvpIc aricimr from DTOdllC- bflllks WOldd lend US DlOnCV tO 01 ^ mi ffOri • • Uev^notn 


the year. This year the over- 
claim is £S0m. 

Instead of redu ci ng each 
council’s grant claim on a 
pro-rata basis, as normal. Mr 
Brittan Is proposing that 
overspenders would lose pro- 
portionately more and some 
underspenders would lose 
nothing. 

Mr Heseltine has Insisted 
that this is nothing more than 
a trick to dress up the un- 
acceptable "differential hold- 
back" as “differential close- 
ending." 

Hie effect is the same and 
councils could rightly accuse 
the Government of breaking 
solemn pledges, he says. 
Virtually all ministers in the 


demand and maintained ouyui as £ Sept. 14-16 Coil Winding International >82 (0202 891339) Wembley Conference Centre 

levels arising from produc- banks would lend us money to Sept 21m23 Harrogate Fashion Fair (01-637 2400) Harrogate 

tivity deals. The financing costs finance an agreed amount of g L 21 .23 Environmental Health Exhibition and Congress 

of holding these stories — at stock which we would repay (01-637 2400) Scarborou gh 


of holding these stories — at stock which we would repay 
between £5 and £6.50 a tonne— with the coal as sold in accord 
are running at over £120m ance with any agreement 

reached." 


are running at over £120m ance wim any agreement , ■ L ~ u . a . , . _ _ . __ , _ .- -r- _ , _ _ u n. , , n-.-,--, 

readiKi " OVERSEAS TRADE FAIRS AND EXHIBITIONS 

, 1 . j July 21-24 Security Asia Exhibition (0483 38085) ....l... ......... Hong Kong 

Greater oetrol A-waste COStS July31-Aug 3 ... Hamburg Trade Days (0202 7S264S) Hamburg 

p Aug 11-15 International Trade Fair for Hotels, Restaurants, 

colac mictl Iin fllliirtpr nf Catering and Food — HOTELRES (01-681 7688) Bangkok 

dales pus II up quailCi UI Au& 18 . 21 Business Equipment and Computer Exhibition — 

oil consumption research budget Aug. 19-21 International Electronic Pack aging a nd Production 8 

„ r-j., . , . Equipment Exhibition— INTERNEPCON (0483 

By Richard Johns By David FuModc, Saenee Effitor 3«)S5) Singapore 

AN INCREASED volume of MORE THAN a quarter of 27-29 Inten^tiomd ^en*s Wear and International Jeans ^ 

petrol sales is the mam reason the research : Aug 30-31 Fashion Samples Fair — INTERCHIC (01-749 3061) Berlin 

for a 32 per cent nse in UK budget of the Department of A 3B5ept 2 ... Indro-Perfomery Exhibition (01-486 1951) Utrecht 

consumption of oil products in the Environment is spent on sg pL 4.7 Women's Ready-to-Wear nothing Show (Paris 

the three months from March management of ra dioacti ve (i) 26868.40) Paris 

to May. compared to the equi- waste, says a department £__* u . 16 International Public Works Congress and Eqmp- 

valent period of 1982. accord- research report Almost £l(hn ^ ment Show *82 (01-637 2400) Houston 

ing to the Department of of a £36m research bndget, g epL International Electrical Technology’ Fair- 

Energy and oil companies- 27 per cent, was spent on this FINNTECH (01-486 1951) Helsink i 

Relatively low petrol prices in 1981- Sept 14-19 International Exhibition for Auto, Motor Car Work. 

and better weather for travel Only construction, with a ?hop Serrire Station and Garage- Equipment ' • 

after the severe winter were the 29 per cent share, received (Qlr7S4 0543) rrankturt 

main reasons for greater con- more support British Nuclear 

Other factors included the contract worth more than £2m BUSINESS AND MANAGEMENT CONFERENCES 

hWhp 11 ^ rirnhwi^Fleptr? w,-?* mP^triMnr f of JuI y 54 MSS Computer and Business Consultancy: Manage- 

burned by . the Central Electri- research on vitrifying^ of mpn t by objectives (Worthing 34755) Worthing 

city Generating Board in May. highly radioactive wastes ji»iy 7 Energy Business Centre: China Offshore (oi-439 

and higher input of naphtha by from spent nuclear fuel ^ 9021) - Caf e Royal, W1 

the petrochemical industry. reprocessing. July 8 CHI: The Protection of Hearing (01-379 7400) Centre Point, WC1 

— ■ July 8 IPS: Inventory cost and control (0990 23711) ...... Kensington Palace Hotel, W8 

July 8 Leisure Consultants and Reed Taylor: Leisure and 

• cfrgfpm/ ctjltpmPnt Work — the choices for 1991 and 2001 (01-377 

> oLiatC^J OLCUtLliCiiL 8833) - Cumberland Hotel, W1 

July 8 Resource Surveys: The Soviet Union and the 

_ « , mm World’s Commodity Markets in • the 1980s 1 

n ] AC i (01-390 0126).... - Cafe Royal, W1 

' i JPS ill I lie: SldlC July 9 ESC: Sponsorship— New media, new developments, 

' WAV' kJLWLV new projeer^ (057282 2711) - Selfridge Hotel, W1 

July 12-13 FT Conference: Business reorganisation — a 

. ^ . • v « . . . ... , , balancing of interests (01-621 1355) Intercontinental Hotel, W1 

for retirement is better en- must combine sensible central jg Industrial Relations Services: Self-certification, 


A-waste costs 
quarter of 


oil consumption research budget 

By Richard Johns By David FuModc, Science Ecfitor 


By Richard Johns 

AN INCREASED volume of 
petrol sales is the main reason 
for a 32 per cent rise in UK 
consumption of oil products in 
the three months -from 'March 


group agree but Mr Brittan to May. compared to the equi- 

»jm « -- « a. x 1QOO tAnnwl 


is still trying to stand his 
ground. 


valent period of 1982, accord- 
ing to the Department of 


There could, however, be This means the Issue will I Energy and oil companies. 


Somerset. A more prolific 
made more workable for in- 


those features of an article 
which must conform to a par- 


dustry, the Confederation of ticular shape in order to do its 
British Industry has told the job." 


have to return unresolved to 
the ministerial group in the 
next two weeks and that 
is expected to annoy Mrs 
Thatcher. 


Government "This would proride a safe- 

In evidence following the pub- guard against straightforward 
lication of a government green copying of many original parts 
paper on possible changes in the but would not prevent the pro- 
law. the CBI says industrially duction of alternative spares of 
produced articles should be different designs 


This would proride a safe- She is likely to kill Mr J Other factors included the 


Brittan's idea on the grounds : greater amount of fuel oil 
that the furore would not be i burned by . the Central Electri- 
worth the tiny penalty, com- j city Generating Board in May. 
pared with the large over- ! and hicher input of naphtha by 
spend. . the petrochemical industry. 


Peter Riddell examines the Chancellors strategy statement 

Howe aims to draw in tentacles of the state 


A COMMITMENT to widen and the crucial Importance df revived, deregulated private for retirement is better en- must combine sensible central 

choice and ownership in in- profits, are being grasped — at rental sector of housing which coureged through institutional management of the big issues 

dustry and the social services, least outside some union leader- would allow people to move than through private saving. Not with a high degree of local 

to deregulation and to make ships. . . From Plymouth to quickly and easily ;o find jobs? the least intractable problem is. autonomy.” 

markets work, should form the Port Talbot, there is a good deal How long must we wait for the of course, the poverty trap. In g Privatisation in social policy: 

core of the Conservative Party's more common sense.” pension funds to respond post- order to cater for those in need. -j- ne waji . f orW ard must em- 

programme for the next Parlia- "V/e shall need to consider lively to the pressure for early successive governments have - orace a constant readiness to 
menu Sir Geoffrey Howe, the whether unions themselves leavers’ benefits?" raised benefiis and allowed real ftiir nftmmitmontc ovtrl 


Relatively low petrol prices 
and better weather for travel 
after the severe winter were the 
main reasons for greater con- 
sumption. 


MORE THAN a quarter of 
the research and development 
budget of the Department of 
the Environment is spent on 
management of radioactive 
waste, says a department 
research report Almost £10m 
of a £36m research bndget, 
27 per cent, was spent on tills 
in 1981. 

Only construction, with a 
29 per cent share, received 
more support British Nuclear 
Fuels received a two-year 
contract worth more than £2m 
from the Department for 
research on vitrifying of 
highly radioactive wastes 
from spent nuclear fuel 
reprocessing. 


Chancellor of the Exchequer, should be made more demo- ^ Reducin'' control'- " D^rezu* 
said in an important weekend cratic to reflect this growing la tion is vital -o create an 


with a high degree of local 
autonomy.” 

• Privatisation in social policy: 
'The way forward must em- 
brace a constant readiness to 
review our commitments and 


speech. 


understanding. Already 


In a lecture to the Conferva- have done much to protect the enterprise” and HjobsT v.e ree-i "" 
re Political Centre summer rights of non-union employees. a searching scrutin*-* of a!’, the 


:?«2. re fi 0 lS.m 0 S5? i! to consider market meebanisims 
: o par. for them The effect on ac a means 0 f promoting ' 

: r ,s undoubted!} cost-consciousness and jnjy i^-20 

— J! ; of extending choice. We must 

• Inaction: "The pressing for- meet the increasingly-frustrated July 27-28 
ward of a strategy of limiting demands of society in a fair 
money growth and govemraen- En d efficient way. Aug. 23-27 

borrowing in the next Pariiu- 

: fi'canti'il TV% n ) Ifih? n63illl. »■ 6 TTlliS ^ COO* 


school at Cambridge — Sir 
Geoffrey was clearly attempting 
to stimulate the party's debar® 
about the priorities after the 
next general election. 


Sir Geoffrey set as his objec- r^e union's* affairs. 


There ere arguments for moving regulations 
fun her to give the unions them- restriction! 
selves back to their members by enterprise, 
ensuring that they 'nave a „ ‘ 

genuine say in the conduct of , ™ 


regulations, the procedures anc 
restrictions which sii'.I mhib:: 


"The counterpart ’o deregu- 
lation is the promotion of com- 


tives tacking the root causes of ' * V.'e have also the remove the peri [)° n ' Bo . th ,_ are '"**** to seen 10 be so. We have to cn- 


Dorrowins in the next Pariia- 

men*. i«= essential. What we nave sl jJ r 6 ^-. a h S* 

to do is to ensure that the defeat n £L lM J3S "S 

o: inflation is permanent and is -' ,umer co ;^ 


unenrployraent. reduction of the irfier.ibiliv :n the labour mar- 


fiscal and regulatory burdens of 


which government. 


the State on people and busi- payers and unions 


ness, and extension of choice. 

The main points in the 
speech: — 

• Reform of the labour marker 
“ There is growing evidence ’.hat 


have conspired to achieve. Is 
thcr? really a case for wage 
council- imposing minimum 
rates which frustrate market 


markets work and generate courage 
growth and jobs." the'ra*? i 

# Taxation: “The rrnsrrair.:? costs snd 
on pursuing further and faster ii?h a 
the path of tax reform are well s?ab;Ijqr. ‘ 


consciousness and more private Sept. 66 . 
provision. Private health 


wora and generate courage further reductions in P-Ori«on. nivaie 
and jobs. ‘Vg rate of incrcn*e in nominal msurance !•« already one of Sept. i-10 

ition: "The rinsrrair.:.* costs and pay and clearly es: a b- Sritein; growth industries. By 


towards 


known. The fir«f i? *he m^mer- 


Privatisaijon 


industry: 


turn and sire of public spending ■•Pubi:c utilities and the so- 


Can v.e afford to move programme? ar.d the r.eed ‘o 


the link between pay and jobs, so pamfuiiy slowly toward? a raise revenue ‘ 




trailed ‘ natural monopolies’ 
canr.o; all be allowed to remain 


1981 the number of people 

covered by private health Sept 7 

insurance schemes had risen 
by over 70 per cent since 1978. 

V,V musi. encourage that pro- “ epti •? • 
portion ro grow faster and s,e P l - 13-15 



- ■ - « ^ an •/rr diiu«T u w KMlUlil - nciiri> ;• Kv nrv moonc 

responsibly. The second : s o-;r without change or challenge to to* Sir 

inhentence of !e;;*:awe -* r ji:n state ‘ ownership. In- c ‘" nfinert ,0 the hert * r ofr - 
lumber. W« have to find c =er- creased competition must be "Another and closely linked 

issue is rhe role of voluntary 


sick pay and sickness benefit (01-328 4751) ... Lords Conference Ctra, NW8 

July 14 Oyez: Direct Labour Organisations and the New 

Law (01-242 2481) Carlton Tower Hotel, SW1 

July 15 The Henley Centre for Forecasting: International 

business prospects (01-353 9961) London Press Centre, EC4 

July 15 American Chamber of Commerce: The Role of the 

EEC Institutions and the Major Current Issues 

Affecting Business (01-730 3176) Hyde Park Hotel, SW1 

July 15 Focus: Understand . Fin ance . Workshop for 

Managers (0273 500796) London Metropole Hotel 

July 19-20 IARC: Power and Political Behaviours in Organi- 
sations (01-486 6106) Great Western Hotel, W2 

July 27-28 MSS: Finance for the Non-Ftnancial Director ’ 

(0903 34755) — Worthing 

Aug. 23-27 Management Training Consultants: Techniques of 

supervisory and management training for - 

trainers (0533 27062) : Leicester 

Aug. 3031 FT Conference: Aerospace enters a new era 

(01-621 1355) Grosvenor House, W1 

Sept. 6-8 Frost and Sullivan: Data communications: • 

advanced concepts and systems (01-486 8377) Mount Royal Hotel, London 

Sept. 7-10 Concrete Society: Industrial Relations Services: 

Law for personnel Industrial relations and ' 

works managers (01-238 4751) - Royal Horse guards Hotel, Ldn 

SepL 7 Centre for Extension Studies: Contingency plan-. 

ning for bomb, arson and kidnapping threats 

(0509 263171) — : Loughborough 

Sept. 9 Oyez/IBC: The art of negotiating (01-242 2481) ...- Hyatt Carlton Hotel, SW1 

SepL 13-15 International symposium on concrete roads (01-235 

6661) .-. i : Tara Hotel. WB 


July 27-28 
Aug. 23-27 


Aug. 3031 


Hyde Park Hotel, 5W1 
London Metropole Hotel 
Great Western Hotel, W2 
Worthing ' 

Leicester 

Grosvenor House, W1 


Royal Horse guards Hotel, Ldn 


.. Loughborough 


Tara Hotel, WB 


m.tentence oi !*5is.a?:v® 
lumber. tt'« have to fir:d c =er- 
sib!r path betweer s;r:pi:r:ty 
which may be ccmmer.d:-S:° for 
fiscal reasons and the survival 
reliefs which, trough arm- 
lou>. arc designed to «?rre .*• 


creased com petition must be 
accompanied by progress 


BEIT BROTHERS 
PUBLIC LIMITED COMPANY 

INTERIM STATEMENT 
HALF YEAR ENDED 28tb FEBRUARY 1982 


GmupTiimovcr 

Unaudited Profir before Taxation 
Corporation Tax a: 5~ ^ 

Group Profit after Tax 

Interim Dividend declared 
Less Waived 
CostofDsvidend 


The Directors have declared an Interim Dividend of LTCWip persiura 
(BSl-UOWp) on account of the year ending r Is: August 1P52. paj-able 
on 16th August, 1982 to members oi :he R:?:t:rasat 2Ctb July. J9S2 
Fotore Prospects 

Current estimate indicate that fer she > carte jl«: Augui: 13S2 
Turnover should ire ir. ih; region cf £!5JO°.OCO 
Pfe-Tax Profit, thereon . after mak-np provion ro: irfere-.: charges of 
approximately UCqjKXMlilSl-fJT^Jr^ijr.JevinordjRaiy 
expenditure of approximately nn ro-argumsation. re -location, 

and dosum of a Subsidiary Company opera: -on, is estimated at 
£LZOO.OOO. 

P.O. Bov So. 1.9 Cox Sirea. Dundee DDI 9AR 


social purpose. The third is a* -r.i.r. 2 and accounting, 
whatever the merits of air- •: may aI>o require the institu- 









-J9.9Z3 

Ib'.lVj 

ISC M) 


I5.H47 


i 5J 'if. 5 


ticular reform? we can'o: io-e 
sitrht of :he fact tint i.r.pie- 
Tjtertrins fundamer^a! cy a r. re- 
in a complex, manual-based tat: 
system is expensive arti time- 
consuming. The fourth is the 
important political consicera- 


•owards more real public owner- n t"£nss3tions. What scope is 
ship— owner-hip by the public there for a further movement 
no: by :be stale. This may toward? encouraging voluntary 
require new -tructurcs for effort in persnnal social ser- 
TioT.^ Yemenis and accounting, vices? And with unemployment 
i: may id>o require the institu- the crave problem t'nzr it is. 
t:on of regulatory bodies to pro- ave there ways in which rhe 
:ec: the public interest and chanties could be brought 
ensure fair competition. individually or collectively 


chanties could 
individually or 


be brought 
collectively 


- Bui the moral of the cease- :-oung people and more care 
ies* debate between government - or ; bnse in need? 
and nationalised industry "A similar approach could he 

managements about inve»irjf*nt 


a ‘tractive in education as well. 


lion that it is bound to c-e end efficient"-- jnd between the tn^pi-pr jo provide jobs for 

cult to introduce ma;or :ndu?Yr:es and their customers Widening choice, encouraging 

.irr 


improvements arc refems -o or. prices and service i- simple P-«v 3 :c provision. ensunne 
the t 3 \- system or. a revenue- -nd funcatr.emal. It rs thaf state ’v-ore flexibility, while im- 


neurral basis. 


end fundamental. It ts tha^ state ’f-ore flexibility, while im- 
owper-n:p .ind control should P- r,1 '"n: value for money; those 


would U oe appropriate to re- tnar.-:ei place ana oy some 
form and reduce the level of decree o? private ownership." 
reliefs in personal and corporate • Privatisation m local govern- 
taxation? Arid to what extent raetti; “in the pas: the only 
could wo reconcile such re due- effective way of achieving not- 
tion with our breader socir! ob’e reductions in ioral auihnr.’y 
aims? Aoain. how far ccr. we : pending .-.as beer, through the 
deal v.ith the o'ovipu? inequities : ran-fer of services elsewhere. 


to hereby standards mizhi be 


Anyone wishing to attend any of dbooe events is a d vised to telephone the organisers to 
ensure t hat there has been no change fa the details published. 


Financial Times Conferences 


BUSINESS REORGANISATION — A BALANCING OF INTERESTS 
London — July 12 & 13. 1982 

This important conference, which follows the publication of the Cork Report, takes place in a vaar 
have or £ 1 n , be * a » the. news and in fact have become a matter of^der piSE 
of fSS; J, ht 'JESlPSTS 2? look at-enmng Jaw and practice and at the American system b? way 
of contrast which has great emphasis on judicial supervision. There will be a review of the cSa 
Report and the conference will pose the question “ Is There a Better Way? ” ““ Cork 

h. n ...TL l cf-?* ainn ^ n « h i£. 0 i I f*5 «£ England, and Muir Hunter, QC, the speakers will 

include Sir Kenneth Cork, Cork GuUy & Co.; Mr W-'G. Madcey, Ernst & Whlnner.Mr S. A, WCarelafce 
Barclay s Bank pIcMrkA W. RuAl, Rowe Rudd & Co. Ltd.; The Hon ThomasW. Lawless, BankrunSr' 
Court. Boston and Mr L. R. Pincott. Stone Platt Industries Ltd. . . . ruptcy 

AEROSPACE ENTERS A NEW ERA 
London — August 31, September 1 & 2.1SS2 


and n:anagement of local 
cchonjj. All these approaches. 


in the taxation of savings? nay yet be true again. If :r.vo!vemen; in ;b? financing 

“ V.e cannot easily j :rt . : o. r should be to private and management of local 
a society that needs to look w**h enterprise not the state or its schools. All these approaches, 
favour on risk-taking anc inno- agencies that such a transfer :n the extent tha; they are com- 
vatjOtt. a speciaily-h:gh rate of of functions must he made. We parihle with our m-erriding 
tax on investment income. N or aa; strengthen local govern- public spending and monetary 
is it easy forever to ac:ep*. ‘.hat men:'* accountability and objectives, arc wnrthv nf 


ne. o ? re anoLicr. i^cro.cps mere SNECMA: Mr Robert Daniell, President, United Technologiei : SiXorsky AirwaftAdmirilSir 

in I ’7be™™l 1 n ! ? Ast05pace °™>P “4 * X IMa, UirKtor ol the AjpbSL! 


is if eas:- - forever to ac:ep*. *.hat 
sclf-h?lp and tiirif* in prCidsion 


reform the rating system. We serious consideration.'' 


31 All enquiries shoald be addressed to: 
f5< The Financial Times Limited 
£ Conference Organisation . .. 
n- Minster House, Arthur Street 
of London EC4R 9 AS 


W;: OLfll 1355 - 
Teler- 27347 FTCONF € 
Cables: HTNCONF LONDON 







t'liiauci.al. Yuttca jiu iiiLij -iuiN J . it**2 


yK NEWS -LABOUR 


- -t; 


Union Baders to withdraw craft 
wor^ rs from NHS stoppage 


BY 


JOHN ^ a y^ a aHTOR 


ifi. 


" ' leader sll engineering unions, has in and General Workers and the 

tfw p inegpgpaw. ^TT* - . _ 5“ e ^ Past given its support to the General and Municipal Workers, 
-: NatioOf^soaafp NHS pay campaign. However which affiliate to the CSEU. are 

L will ^ *fr “^uexs its representatives at today's not covered by it in negotia- 

— Jr* lafifcs 111 talks, Mr Alex Ferry, the tions for their NHS members. 

escalation CSElTs General Secretary- and Their leaders will argue a 

g tJ rZ. servace dispme. Mr Ed Scrivens ah executive separate line from the con- 

P.flD O-6,00Q craft workers council member of the Amalga- federation representatives. 

tfo HJKdy to be told to work mated Union of Engineering -- . r— 

Workers, will argue that the 
support was given on the basis 
of one day strikes and before 
the Government improved its 
pay offer from 6 per cent for 
nurses and 4.5 per cent for other 
staff to 7.5 per cent and 6 per 
cent respectively. 


th . WV daring some or all of 
strike, called by 
5? services commit- 

tee fawn Jtdy 


.This . dissent in the unions' 
e®* 5 — 1 the first since the dis- 
pute start ed eight weeks ago — 
. smface today at the meet- 
tup officials of all unions 
wintii have members in the 
healt h se rvice. Mr Leu Murray 
tw TOC General Secretary, 
called today’s meeting 
TTie Confederation of Ship- 
building and Engineering 
Unions, which brings together 


Giant tractor 
on show 


Some NHS electricians who 
are linked to wage levels set by 
the Electrical Contractors’ Joint 
Industrial Board have settled 
already — though . others are 
dependent on “the overall NHS 
settlement. 

Unions such as the Transport 


ONE OF the biggest tractors 
made its debut in Britain yester- 
day at the Royal Show, exhibited 
by Massey-Ferguson. 

The vehicle is intended to 
boost the productivity of cereal 
growers and other big pro- 
ducers. Its work output is in- 
dicated by the giant 160-gallon 
fuel tank which gives a full day's 
work without refueling. 


Wider ban ! NGA fears shift in 

Fleet Street power 


on fair pay 
pact sought 

By Dadd Goodhart, Labour Staff 

THE GOVERNMENTS plans 
to set aside the Fair Wages 
Resolution has been backed 
by the majority of employers’ 
organisations. 

The Department of Employ- 
ment has completed a one- 
month consultation with 
interested parties about the 
future of the resolution, 
which ensures that govern- 
ment contractors pay wage 
rates not less favotnable than 
those established by relevant 
collective agreements. 

The Engineering Em- 
ployers? Federation and the 
Institute of Directors have 
led a call for abolition. The 
GBI has been given a week’s 
extension by the department 
to reach a decision. 


BY IVO DAWNAY, LABOUR STAFF 


THE possibility of a merger 
between Fleet Street electri- 
cians and the Society of 
Graphical and Allied Trades is 
the subject of growing specula- 
tion among members of the 
National Graphical Association, 
the Tnaiw craft print union. 

Several delegates to the NGA 
conference in Eastbourne last 
week alleged that secret talks 
between the Electrical Plumb- 
ing Trade Union’s London 
Press Branch and Sogat have 
been under way for some tune. 

The rfaimn were immediately 
denied by Mr Sean Grarty, 
secretary of the L300-strong 
EPTU branch. 

“Neither L nor any members 
of my committee are having 
any discussion with Sogat. 
There is no truth in it,” he 
said. 

The question was raised 
openly on Friday when Mr Mike 


ite. 


5 

the 

the 


Power, a London dole 
formally asked the union 
national council whether 
NGA had opened talks with 
EPTU. 

He was backed by Mr Calvin 
Brindley of Manchester who 
said he had heard Sogat was 
" actively wooing ” EPTU Fleet 
Street members. 

Mr George Jerrom. national 
officer, said that the national 
council had not heard anything 
to support the claims. 

A realignment of Fleet 
Street's electricians could 
seriously alter the 'balance 
power among newspaper unions 
away from the NGA. 


With the growth of comjnrt 


. :er 

print technology, many NGA 
members are already concerned 
that they do not receive the 
training to maintain equipment 
in areas under their jurisdic- 
tion. 


BUYING INDEX-LINKED GILTS? 



Government 

Stock 

National Savings 

Stock Register 



Low cammissian. 
Interest paid in full. 

Two Index-linked Gilts have been added to 
the National Savings Stock Register They are: 

42% Index-linked Treasury Stock 1988. 

- Dividends 30th March and 30th September. 

•2Ya% Index-linked Treasury Stock 2011- 
Dividends 23rd February and 23rd August. 

Both the interest and the redemption value 
of thesestocks are linked to die RPL 

Altogether there are now 52 Government 
Stocks available through National Savings, 
and these are dear advantages inacquuiDg Gilts 

this way - — — 

The rate of commission is particularly 
attractive on modest investments. Bor instance, if 


And the interest is paid gross. Although the 
dividends are taxable, it may well suit you not to 
have the tax deducted at source. 

"Ybu can buy up to £5,000 worth of anyone 
stock on any one day.Thereis no limit to your 
total holding. 

IfouTl find all the details at the Post Office. 
*j§ Ask for the Government Stock leaflet, which 
includes a list of the stocks available. 

Pick up an application form with its prepaid 
envelope at the same time.You can then post your 
appHcarion direct to the Bonds and Stock Office. 


NSI National Savings 


Stock Register 


Unions to seek seats 
on Engineering Council 


BY JOHN LLOYD, LABOUR EDITOR 


UNIONS representing engineer- 
ing workers will push for 
representation on the new 
Engineering Council, a move 
which may shatter the tradi- 
tional barrier between char- 
tered professional engineers 
and shopfloor workers. 

The demand was passed 
narrowly at the annual confer- 
ence of the Confederation of 
Shipbuilding and Engineering 
Unions last week. It commits 
the CSEU to fight for seats on 
the council, possibly through 
direct election by engineering 
workers. All members of the 
council are appointed at 
present. 

The proposal is -that the 
council should embrace “ engin- 
eering technicians ” and “ tech- 
nician engineers’ 1 as well as 
chartered ' engineers and 
managers. The Amalgamated 
Union of Engineering Workers 
and the Electrical and Plumbing 
Trades Union organise some 
250.000 of these craft workers. 

Success would have far- 
reaching implications for the 
engineering industry, bring the 
unions into debate and dedsi on- 
making on the council, and 
hasten the blurring of technical 
and other grades. 

The chairman of the new 
council. Sir Kenneth Curfield, 
chairman of Standard Tele- 
phone and Cables, and JDr. Ken- 
neth Miller,' its director-general, 
have a wide brief to improve the 


industry’s standards and reduce 
duplication and rivalry between 
engineering institutions. 

It is likely to take over regis- 
tration of engineers from the 
Council of Engineering Institu- 
tions soon. 

Engineering union officials 
believe that the number of 
craft engineers within the 
scope of tiie council exceeds by 
50,000 to 100,000 the number of 
‘ ‘professional” engineers who 
would be covered. 

The move was a contentious 
one and scraped past on a card 
vote. The white-collar unions 
ASTMS and AUEW Tass argued 
strongly against the proposal, 
which they said would exclude 
their unions from the council, 
since the motion did not men- 
tion them. 

Mr Stan Davison, deputy 
general secretary of ASTMS, 
said the conference should not 
adopt the motion because it 
was contrary to the TOC 
Initiative. 

Both he and Mr Ken Gill. 

f meral secretary of AUEW 
ass, were proposed by the TOC 
for the council but not 
appointed. 

Mr Geoffrey Drain, general 
secretary of the National and 
Local Government Officers' 
Association, is the sole union 
nominee. Mr John Lyons, 
general secretary, of the 
. Engineers’ . . and ■ —Managers' 
Association, has been 
appointed. 


APPOINTMENTS 


Changes at Halifax 


Mr J. O. Spalding has become 
chief general manager of the 
HALIFAX BUILDING SOCIETY 
in succession to Mr A. J. Thayre 
who has retired. In addition 
former general managers Mr M. 
Maeasfcill, Mr N. S. Watson and 
Mr R. C. Wheway have been 
appointed deputy chief general 
managers. 

* 

BARKER AND DOBSON 
GROUP has appointed Mr W. 
Kenyon as deputy chairman. 

Mr Richard Gardner has been 
appointed managing director of 
LESLIE & GODWIN NON- 
MARINE with effect from 
Monday July 5, 1982. 

* 

THE ASSOCIATION OF 
INSURANCE AND RISK 


Surgikos is a subsidiary of the giant 
Johnson & Johnson company, and are 
involved in the manufacture of infection 
controi products for use in the medical 
and health care fields. A dean 
environment, modem facilities, and a 
conscientious workforce are prime 
requirements. All of 
these, they have found 
in Livingston, from 
which they now 
produce a variety of products for export 
ail over the world. 

Commentingon the decision to 
move to Livingston in the first place, a 
decision now proving highly profitable, 
Managing Director of Surgikos, 

Steven Desmond said: 

ii 


-v 


■ ;• . \: m t '=f\> 

_ • s - 

I liiduXV'"; 'J 



- W»'ft ■ Mutfeal Product, Company and nead a dmi environment 
and mxhm facSitm and above *0 a lUVid and conscnfltfcKn wodrfem if 
we're going ta caueed. Mere , n li w g g w we found that our output has 
gamed ubicunxalljr over the law two yean with the flint cooperation 
from our workforce^ ^ 


Why J&J’s Surgikos 

i<-rc fr\r ovnnrr ® \A /— »■ ;• »L. .L , 

iecicfeif to 


schools, services, and general community 
structure. There are over 1 60 companies 
and 40,000 people already based here. 
Livingston is about 10 minutes from 
Edinburgh Airport, and another 15 from 
the capital itself. The motorway network is 
first class, and for those who need to be, we 
are within minutes of 
the ports of Grange- 
mouth and Leith. 

Even Glasgow, in the ■ 
West, is only about ^ an hour away. But 
more than anything, you'll find that 
Livingston Development Corporation 
themselves will bend over backwards to do 
everything in their power to make things 
happen for you. 



MAKE IT IN 
LIVINGSTON 


Managing Director of SurgiliiK, Steven Domond. 

Livingston s publicity materiaisays — . 
the welcome s warm, the Grants are great. 
But there’s even more to it. Although 
Livingston has ail the financial advantages 
of- New Town status, it is old enough to be 
fully mature in terms of housing, shops.' " 


"ToLar Mr. Pollock,- __ *1 

9 I’d be interested in finding out more about Livingston 
® Please send mefurther details 

■ Name . . ... 


I Position 


0 Compan y 

| Address 





■nos rases «$*■ psh bgh 


What more can we say? 

Contact James Pollock, 

Commercial Director, 

Livingston Development Corporation, 
Livingston, West Lothian, Scotland. 
Tel. (0506) 414177. 

Telex 727178. 


MANAGERS IN INDUSTRY 
AND COMMERCE has appointed 
Mr Hugh JR. Loader, a chairman, 
and Mr Terry E. Sparkes as 
deputy chairman and chief 
executive. 

★ 

Fallowing the recent death of 
the chairman, Mr W. T. Hale, 
the Board of THOMAS 
MARSHALL (LOXLEY) has 
appointed Mr J. R_ GledhIII as 
e xecu tive chairman. Two other 
appointments to the hoard are 
■Mr C B, Jackson (Secretary) 
and Mr T. L JL Hale (non- 
executive). 

* 

The' Board of HALCROW 
KWBANK PETROLEUM and 
OffShore Engineering Company 
announces the following: Mr 
M. E Ewbank, chairman of 
Ewhank and Partners, takes over 
as chairman of Halcrow Ewbank 
from Mr D. S. Mayo, and Mr 
R. H. Pickering, commercial 
manager of Ewfjanks, replaces 
Mr A. a Blake. 

* 

Sir David Steel, former chair- 
man of the British Petroleum 
Company, has been elected 
president of the London Chamber 
of Commerce and Industry, 
succeeding Earl Jellicoe, chair- 
man of Tate & Lyle. 

* 

THE BOARD OF SYSTEMS 
PROGRAMMING HOLDINGS 
says Mr David Thomson will be 
joining the board as joint 
managing director of SPH and 
SJL on September L 
* 

EMERY WORLDWIDE has 
appointed a new director, Mr 
Christopher Bnckerfield, to bead 
up the company’s operations m 
the UK, Scandinavian South 
Africa and parts of the Middle 
East. 

★ 

Mr E. j. Pateuuu has been 
elected chairman of the board 
? f Erec tors for JOHNSON 
MATTHEY BANKERS. 

* 

TANDATA MARKETING has 
appointed Mr Peter Dodds as 
sales director. He was 'manager, 
marketing services for Redifon 
Computers, Redtifustan Group. 

* 

UNITED CITY MERCHANTS 
has appointed Mr David J. 
Rippon as managing director of 
U.C.M. Trade Finance and will 
be appointed to the U.CJ4. board. 
His main responsibility will be 
to develop the group's trade 
finance activities. He will 
co-ordinate the group's confirm- 
ing business from London. He 
was with Arbuthnot Latham as 
deputy chairman of the export 
finance operations as well as a 
director of ita banks in the 
Middle and Far East* - 

: • r ' * 

SCANDINAVIAN ' BANK 
GROUP has promoted: Mr Jan 
O. Blrkcnheuh to assistant 
general manager; Mr Edmund J. 
Clarke — manager; Mr Nicholas 
C. Cannon— manager; Mr Geoff 
T. Rilchic— manager; and Mr 
Graham J. Vlckcrj— manaecr. 


CONTRACTS & TENDERS 






MHAVA SHEVA PORT TRUST 

2ND FLOOR. IMPERIAL CHAMBERS 
WILSON ROAD, BOMBAY 400 038 

PHEOUALIFICATION of contractors 
ON GLOBAL BASIS - 

•nu, Gavsnonenl of India U desirous or eons trucrino new 
M»« Shew .nd trie Ho». 

SnSuo Pvt. Ltdjui Consulting Eng-.n^cr* lor the Project. 
Pregualifieation bids are invited from Contractor*/. ojiU 
Ventures on global basis for ; 

CONTRACT I - MAIN WORKS 

Work includes earthwork, construction attaar buBt ber0a.fottr 
ronteinerberibs, storages, flexible pavementgjoeda.ngaf^y and 
com missioning of four container cranes. 

vnlueUSS445 million. ComF^etxm time 4w months. 

CONTRACT II - DREDGING 

sse5sgjssaa:ai«5S5“““'“ 

\ 3 ^SatSSteSiamilliCffl. Dollverv period *4 months. 

“ CONTRACT IV - CONTAINER 

HT3TTTf=WT STATION 


$ 

CO 

z 

§ 



contract -value us 5 ao mwwn. 

$ Engineers 

UJ «*» in P 


to 

i 



% 


ment will be issued after 1 . 9 . 1882 . - 

Preoualificatioa bid should be ^submitted 
^Seerson or before 30 . 9.82 C^y.prequalifiedCanMmg 
^mtpanies/ joint Venhnes will be invited to quote for toe 

The Consulting Engineers/Ero ployer r eserve the right to reject 
any bid without assigning any reason- 

ffl HOWE(INDIA)PVX LTD. 

CONSULTING ENGINEERS 

81 NEHRU PLACE, NEW 


1. 


2 . 


INTER-AFRICAN CO-OPERATION 

L’OFFICE NATIONAL DES TRANSPORTS 
(ONATRA) 

INVITATION FOR INTERNATIONAL TENDERS 
Financed by the African Development Bank of Abidjan, 
the Republic of Zaire National Transport Office 
(ONATRA) Invites tenders for the supply of: 

File 1322f2 — Lot 1 — An Oxygen Production Plant 
Lot 2— An Acetylene Production Plant 
File 13260 —6 Push Boats (1.000 h.p.) 

Applications will be accepted front all experienced firms 
with the exception of firms and equipment from the 
Republic of South Africa. 

Interested firms can obtain the detailed terms of reference 
of the Invitation for Tenders from: 

Direction des Approviaxonnements ONATRA 
ONATRA Building - 3e.etage - local 323 
Boulevard du 30 juin 177. Kinshasa 

KINSHASA 

or, abroad, from: 

Sodete Generate des Minerals /Division Zaire 
1, rue de la Chancellerie, 4e.etage 
B-1000 Bruxelles - tel. 511.39.10 
on payment of the sum of 1.000 Zaires or DM.400. in cash 
or by crossed cheque payable to ONATRA and made out 
in one of the following currencies accepted by the Bank 
of Zaire: ' 

DM, SF-, FF., BF.. S.cr.. D.cr., N.er.. £ sfg.. U.S.S, 
Can. Dollar, P.esc.. ItL- Dutch FI.. Aust.sch. 

The amount most be equivalent to DM.400. 

3. Final Date for receipt of Tenders: Friday, 1st October 
1982. at 3 pjn. (Kinshasa local time). 

4. Tenders should be addressed, enclosed in a double sealed 
envelope, to: , 

President de la Commission des Adjudications 
Office National des Transports Onatra 
Building Onatra, 7e.ecagc, local 707 
Boulevard du 30 juin. 177 
BF. 9S, Kinshasa 1, Republique do Zaire. 

The outer envelope, which should bear no name or mark 
indicating the tenderer, should bear, in addition to tH 
above-mentioned address, the subject and number of ti» 
file concerned. 

Tenders can also be presented to the President of the 
Commission at the commencement of the opening session. 

5. The public opening session, which tenderers are allowed 
to attend, will be held in the: 

Salle de Conference de la Direction Generate 
Building Onatra, 7 etage. Ideal 711 
Boulevard du 30 juin 177. Kinshasa 
at 3 pun. on Friday, 1st October 1982 (local time). 


AVIS D'APPEL D'OFFRES INTERNATIONAL 

REPUBLIQUE FEDERALE 
ISLAMIQUE 
DES G0M0RES 

MINISTERE DE L'EQUIPEMENT, 

DE L'ENVIRONNEMENT 
ET DE L'URBANISME - MORONI 

Fourniture de vehicules de liaison et 
de mat£riefsdeTravaux Publics comprenantl 2 lots 

Le dossier d’tppel d’off res p*ut Mr* retirt (ou cxpfcdit sur 
demande) 

AUX COMORES 

— Minlstire - de i’Equipemeni de rEnvIronnement, et de 

njrbamsme. Direction Ginirale des. TP. 8P 12— MORONI 

04 FRANCE 

—Bureau Centra! d’Ewdes -pour ta Equipemenn d’Outre-Mer 
IS Square Mix Hyman* 75741— PARIS CEDEX IS— 

conere remise d’un cheque bancaire de 600 FRANCS FRANCA IS 
pore compris, libefl£ au nom du: 

—Bureau Central d'Etudes pour les Equipements d’Outre-Mer 
Les off res, obligatoirement rtdigies en langue frangahe. lerant 
- par " M,n, «* re d * * Equlpement. de 1 *Envlren nement at de 
l Urpanisme— 

M ^ Trawux p uhli«-BP !2r-MORONI Jusqu’au 

30 September 1982 fi 18 heures date limite. ^ 


PORT OF GENOA AUTHORITY- ITALY 

(CONSORZIO AUTONOMO DEL PORTO D1 GENOVA) 

JhHH to notify that on- July 23rd 1982, at 9M hour*. |„ , haU of 
San Giorgio Palace, headquarters of the Port of Genoa Authority 
A SALE BY PUBLIC AUCTION 
OF 25 IRON BARGES 

WITH A CAPACITY FROK in TO 21S METRIC TONS 
will be dealt with according to the system mentioned In 
Ari* 73. letter (b), of RD 837/1924 
Participation conditions are shown In the anneiincemsnt published 
in the Official Gazette of the Republic (“Gazictu Ufficialo della 
Repubblfra ) on June 22nd 1982, copies of which can be (.btained 
Oil request from the Port Authority’s Tenders and Contracts 
Service, Palarao San Giorgio. Via della Mercanzia L 16123 Genova. 
Italy, against paym**- •, f.i r 2.000. " 



ESS?- 




THE WEEK IN THE COURTS 


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BPERATIOI i' 

■n:iN'r. iRT(i 

':!Mnn ; 


TK e kK is a constant tempta- 
tion in any tribunal, be It a 
court law an admtafetra- 
trre body exercising judicial 
fimcdons, to decide cases on 
wiiat It thinks justice demands. ■ 
P*hp-tree justio^ as opposed to 
justice according to law, is. 
liowevcr, the role of a Solomon, 
and not of a judge sit ting under 
a developed system of law. ‘ ' 

A reminder -of the judge’s 
• duty, to. apply the. law and leave ' 
any consequential in justice to 
legis lative amendment, . has 
come from die House of Lords! 
The case, of In Re Energy Con- ' 
version Devices Incorporated 
involved the ewrase of- powers 
of the Patent Office, bat the 
remote of Lord Dipfock apply 
likewise to all those who sit in 
judgment in tribunals or courts." 

It is a fundamental principle 
of <mr constitution, unwritten 
though jt may be, that questions .- 
of construction of all legislation 
are questions of law to be : 
d eterm ined authoritatively by ’ 
courts jof law. - . Errors in con- 
struing legislation, by inferior 
tribunals which are not courts 
of law are corrigible by- die 
procedure of judicial review,' 
•while mistakes by coarts of law 
can be corrected enough the 
appellate system. • 

However specialised the 
tribunal and however much : 
prestige the personnel in their 
specialist fields. may have, no 
tribunal -and no court of -law- 
has any power to vary ihe mean- 
ing of .the language of the. 
statute from case " to case. 
Because die application of the 


Proper 'construction m i g ht lead 
to an unji&t -rfcSlt lh Ohe case 
never justifies 'the tribunal in 
changing. fte meaning attribut- 
able to the statutory provision. 
' That is what is meant by the 
phrase, fee rule of law.. ' 

Section 88 of the- Patents t Act 
1977, which lives effect to the 
Patent . Co-operation Treaty, 
prescribes the procedure to be 
adopted by.' the Patent Office, in 
dea ling : > wStii ' ” inteniationel 
^I^ieataais. .'for a -TJpR 'patent 
T5tepp>cedure .Jays. down, thine 
limits . within -..which various 

steps 'must- be- -taken;, -and, 
broadly -speaking, the Treaty' 
require? teat the Pateijfc- Office 
in each state should - treat .an 
intern ational, apphcatuKT so 
less favourably than ani appll- ■ 
cation made directly Jblit for 
national patent..- - - ■f:*.; 

One of the rules, tempting a 
time limit relates, to theiperiod 
.wi^tin. winch a copy ofziihe h> 
ternadional application S&st' be 
filed at theJPatent Office-Sad the 
filing fee must- be -paidr 'The 

time- limit -appHcabfe ^6 tb e 
applications Jn 3he testttet case 
wa s-- 29 months- -fim- "the 
priority date claimed the 
original international fltppJica- 
tipn to tbe receiving' office — 
in. toat instance, the U!SsP&tent 
Office.' By thfr relevant <Ea.te the 
applicants had not paid&to the 
UK Patent Office any ffimg fee. 
That failure to comply, vwitb a 
time limit- meant that the appli- 
cation was deemed, to be with- 
drawn. • 

1 Another ."procedural!.- rule 
stated that some thwq > -limits 


could be extended^by tbe Comp- 
troller, of. Patents, bur the time 
limit prescribed in relation to 
the payment. of the Sling fee 
was expressly- stated, to be' ex- 

- eluded from the discretionary 
-power of tee Comptroller. It 

had to be complied with -strictly. 
The problem arose because of a 
decision of Mr Justice Graham 

- in 1979 itt Pater SpA’s Apptico- 
Hon*. ' 

- In that case the judge justi- 
fled the giant of extension of 
time , .on the ground that, 
despite the statutory provision 
.that an application should be 

- taken to be withdrawn . if the 
conditions, were not fulfilled, 
there were eStant proceedings 

^before the Patent Office and the 
power to rectify ^regularities 
overrode; the -prohibitions on 
exteotions of. time. That dis- 
tinction has now been held -by 
■the House of Lords to be im? 
.permissible in law.- 

■ In tbe course Of his judg- 
ment, toe judge had said that ' 
the Patent Office was “ an office 
for granting patents and not for 
refusing them, and in a special 
case such as this, when there is 
a conflict between- two' rides, 
They should, since justice' 
demands it, as a matter of dis- 
; cretion. be read together in 
such a way as to aid grant . 
rather than refusal.” The 
italicised phrase appeared to 
■have been understood by the 
Patent Office as. meaning that, 
for the. purpose of proceedings 
"in that office, there was. a dis- 
. cretion . .vested in .the officer 


dealing with the' matter, to treat 
tbe saute words in the statute, 
or the rules made under the 
statute, as - bearing, different 
meanings in different cases. 

. according to ; whatever meaning 
the. officer thought most appro- 
priate to : enable him to do 
.justice. 

Ajv example of this heterodox, 
uncharacteristically un bureau- 
era tic, approach to questions of 
statutory, construction was pro- 
duced to the law Lords in the. 
form of a-recent letter written 
by an assistant comptroller in 
relation to another patent case. 
He wrote: - “ If if were necessary 
to ignore a statutory provision 
to do so, I considered (and still 
consider).', that I have an in- 
herent discretion to ignore the 
provision. Accordingly, I 
directed, using that inherent 
discretion, that in tills type of 
case the Form 10 had to be 
accepted out of time and acted 
..upon. This was done . . | 

Counsel appeared before the 
House of Lords on behalf of the 
Patent Office to repudiate the 
apparent Claim -by the Patent 
Office that- it could vary its deci- 
sions by ignoring the . law . laid 
down by . Parliament. The’ dis- 
claimer to acting above tbe law 
provided, however, the oppor- 
tunity - for - some forthright 
joffixiaS language about the rule 
of law, which is directed to 
others than just the comptrol- 
lers at the Patent Office. 

•[1979] F£JL 647. 

Justinian 


Favoridge makes mark on her first outing 


IT .SEEMS probable . that we 
saw two outstanding pe rform ers 
of different generations at 
Sandown on Saturday;' There 
is now little doubt that Kalagtow ' 
is the best 10-fuxiong per- 
former of four- years or older . 
following his -rout. of such able 
performers as Lobkowiez, 
Rocamadomr and. Peacetime in ■ 
the Coral-Eclipse.' It also seems 
fair to assume that Favoridge 
is something quite -out of the 
ordimoy following her race 
‘ course debut 

Introduced in the opener, at 
Sandown on . Saturday, . tbe 
Kingston Maiden Efflies Stakes, 
Favoridge always travelled 
with comumate ease, in the 
hands of Pat. 'Eddery... After 
jumping off shaaply, the New- 
market filBy, who had to mass 
a race at Newcastle last week 
through' the abandonment of the 
Gosforth Pork. card. Was then 
allowed to idle (still in the lead) • 
^tfore being asked to win bet . 


race approaohang tite final 
-fhriong marker. 

Her response to .Eddery’s 
question was immediate. 
Lengthening her stride the two- 


RACING 

fcY DOMINIC WIGAN 


year-old went on to put sir 
lengths between- herself and 
Kimble GirL 

Favoridge is certainly bred to 
rank among the best of her 
generation. A heautifully- 
baianced bay filly by Riva Ridge- 
she is but of the Baldric H mare 
Favrietta, already responsible 
for such “ flying machines ” as 
Amaranda. 

.Octogenarian, Harry. Wragg. 
who rarely ventures away from 
his Newmarket home these days, 
was not present to his Favqridge 
wip but bis. sot}, Geoffrey, said: 


“ I don’t know where she wiQ 
ran next, but it . could be the 
Lowther Stakes at York.” 

At the present time there is 
no juvendle - fiHy or, for that 
’ matter, colt, who I would cafe 
to support against Favoridge. 

Domynsky, one of the North’s- 
leading two-yearoUd ' colts, 
returns' to the fray at Ponte- 
fract today. Tbe Easterby 
-juvenile . who, • rather snr-- 
pmingily, failed to cope with 
Time's TSde af Beverley last 
time out, funs in the Spin- 
drifter Sprint Sakes. 

If he is not now beginning 
to lose his edge following a 
busy spell which- indnded two 
successful ‘trips" to- Ripon, 
Domynsky will find no, difficulty 
in giving weight tp two other 
recent winners in Join The Club 
and Onr Molly. ; 

- Turning to the evening card 
at Windsor, Dance In May and 
Scottish Green appeal ' as nro 
of the better proportions. Dance' 


In May was in no way flattered 
by the three lengths margin of 
her victory over. Grumble at 
Leicester just under a month 
ago; ‘while Scottish Green is 
thought ready to return to his 
best in the Clsremount Selling 
Handicap. ' 

In his only race to date- this i 
term, Scottish Green did bis best 
work in' toe closing stages of 
the 17-runner Wiltshire Handi- 
cap at Salisbury in May. 

PONTEFRACT 

2.45 — Domynsky 

3.45 — Royal Diplomat 41 
5.15 — Misdirected ■ 

WINDSOR 

6.45 — Dance In May 
7.10 — Seotish Green 4 ** 

8.05 — Second Miracle 
9fi5 — Sabre Dance. 


6.40&55 am Open University. 

1.00 pm. News.' Afernoon. L27 
Regional [News (for Eugiand) 
except London and Financial 
Report ' L30 Postman Pat 3.00 
Your Songs of Praise Choice. 
138 Regional News except 
London. 3.40 Play School 4.05 
Pixie and Dixie. 4J.0 Gulliver's 
j Travels. -. 

5.00 Newround, 

5.10 Blue Peter Flies, the 
Worid: Japan. 

5£S Paddington. 

540 Evening News.. 

- 6.00 Regional News Magazines. 
025 Nationwide. 

055 Bugs Bunny. 

- 7.05 Triangle. 

750 Worid Cup Grandstand: 
Live coverage from tbe 
Bernbeu Stadium, Madrid. 

955 News. 

1050 The Monday Film: “The 
Sunshine Bovs" starring 
Walter Matthau, George 
' Burns. 


All EBA regions as Louden 
except at the foil owing times. 

ANGUA 

MS Ortooji Tim*. 9.45 Intamadona! 
Darts. 10.1 S Cltitts. 11.10 Hoar Hare. 
11 JS Country- People. 11 JO Wattoo, 
Wattoo. 1 -2D pm Anglia Nows. 6 JO 
About Anglia. 1140 Preview. 12.10 am 
Four Into One. 

BORDER 

9J0 am-'Hiatoiy oF tba Motor Car. 
9.55 Story Hour. 1&40 Untamed World. 
11JJ0 Sesame Street ire pm Border 
News. 6J30 Looks round Monday. S.45 
Campaign. lire Border Nawa 
-Summary.. 

CENTRAL 

sn5 am It's a Musical World. 10.45 
Beyond .Westworid. lire Stingray, 
ire -pm Centra] News, ire Patterns, 
are Central Nawa at the Royal Show, 
fire Central. News. lire Central 
News. 1X15 am Coma Close. 


TELEVISION 

" Tonight’s Choice ^ 

Is' that the sound of breaking glass dr The Sound of Music? 
Probably tbe latter because Julie Andrews and Christopher 
Plummer are very popular with 65-year-ohi nuns and there will 
be a good audience for yet another re-run of the craggy weepy 
on BBC 2 at 750. The Corporation paid a lot for the TV rights 
so if you miss it this time, hang about. 

. Big films dominate on all channels, slotted In to compete 
with the Worid Cup. At 1050 on BBC 1 there is a first TV show- 
tag for The Sunshine Boys which has a good pedigree— George 
Burns,- Walter Matthau and a Neil Simon script. ITV has Rio 
Conches. If it sounds familiar it is because the plot line— “a 
hazardous expedition through Indian country” — is not the most 
original in cinema history. 

On BBC 2 at 6.55 a very odd new series starts. It is from the 
Pebble Mill studios in Birmingham, not usually a recommendation, 
and mixes David Soul, who was either Star sky or Hutch, and Sally 
James who knows a* costard pie when one is pressed into her 
face. Together they are presenting music and chat and it could 
either be the no no r of the year or a surprise success. Much 
depends on how the soulful Soul copes with the indefatigable 
James, who is as sparky as a Catherine Wheel. 

ANTONY THORMCROFT 


6.40-755 am Open University. 
1050 Play SchooL 
+5.40 pm Laurel and Hardy. 

6.00 The World About Us. 
655 Six Fifty-five Special. 


755 News. 

750 “ The Sound of Music " 
starring Julie Andrews, 
Christopher Plummer. 
10J5 John Cheever. 

10.45 NewsnighL 


CHANNEL 

ire pm Channel Lunchtime Nswe. 
ere Channel Report. 10.28 Channel 
La re News, lire Aujourd ’hul an 
France. 11.45 The Incredible Hulk. 
12.40 am Nowe end Weather in French. 

GRAMPIAN 

are am First Thing. 9JS Sesame 
Street. 10J6 Feature Film—" Won Ton 
Ton: The Dog That Saved Hollywood. 1 ' 
ire pm North News. 6.30 Summer at 
Six. lire Top Rank Fights of the 70*. 
1Z35 am North Headlines. 

GRANADA 

9.30 am The History of ths Motor 
Car. 9.50 Story Hour. 10-35 Untamed 
World. HA) Sesame Street, ire pm 
. Grenada Reports. Are Grenade- 
Reports. 11.40 City of Angels. 

HTV 

9£5 am 3-2-1 Contact. 10.25 Kum 
Kum followed by Werner Brothers Car- 
toon. 10>I5 Clapperboard. 11.10 Vicky 
the Viking, lire The Greatest 


Thinkers, ire pm HTV News. 6-30 
HTV News. 1028 HTV News, lire 
Video Sounds. HTV Cymru/Wsles as 
HTV West except: 11.10 Bailey's Bird. 

12.00 Dacw mam yn dwed. 6.30 pm Y 
dydd. 6.45 Report Wales. 

SCOTTISH 

10.00 am Target the Impossible. 10-25 
Circus. 1050 Hands. 11.15 Story Hour, 
ire pm Scottish News. 6.30 Scotland 
Today and Crimed ask. lire Late Cali, 
lire Nero Wolfe. 

TVS 

9J0 am Sesame Street. 10 JO Story 
Hour, lire Untamed World. 12.Z7 pm 
Gua Honeybun’s Magic Birthdays. 1.20 
TSW News. &30 Today South West, 
lore TSW Late News, lire Posi- 
scriot. lire The Incredible Hulk. 

TTV 

9 JO am Untamed World. 10.00 
Frlonds of My Friend*. 10.25 Tarzen. 
11.15 The Real Worid. lire Larry the 
Lamb, ire pm TVS News. <L30 Coast 


(S) Stereo broadcast (when broadcast 
on VHP) 

RADIO 1 

5.00 am Ae Radio 2. 7.00 Stave 

Wright. 9.00 Simon Betas, lire Dsva 
Lea Travis including 12J0 pm News- 
beat 2.00 Paul Burnett. 4.30 Pster- 
Powell Including 5 -30 Newsbeat. 7.00 
Stayin' Alive with Andy Peebles. 8.00 
David Jensen. 10.00 John Peal (S). 

RADIO 2 

5.00 am Ray Moore (S). 7.30 Tony 
Wogan (S). moo Jimmy Young (S). 

12.00 Grgfitf Hunniford (SJ. 2.00 pm 
Ed Stewart (S}. 4.00 David Hamifton 
fS). 5.45 News; Sport 6.00 John 
Dunn (S). 8.00 Folk on 2 (S). 9.00 
Humphrey. Lyttieton (SJ. 10X0 Funny 
You Should Ask. tore Star Sound. 


RADIO 


11.00 Brian Matthew. 1.00 am Encore 
(S). 2.00 You and the Night and the 
Music (SJ. 

RADIO 3 

SJS am Weather. 7.00 News. 7.05 
Morning Concert (S). 8-00 News. 8-05 
Morning Concert (continued). 9.00 
News. 9.05 This Week’s Composers 
(S). 10.00 BBC Northern Symphony 

Orchestra (S). lire Flute, Oboe and 
Pieno (SJ. 12.15 pm Tchaikovsky (S). 

1.00 News. 1.05 BBC Lunchtime Con- 

cart (SJ. 2.06 Matinee Musicals (S). 
3-06 New Records (S>. 4.55 News. 


5.00 Mainly for Pleasure (S). 6J30 

Music for Organ (S). 7X0 Un Coaur 
Simple. 7 re BBC Symphony Orchestra 
in Hong Kong (SJ. 8.25 My Merry 
Mornings. 8.45 BBC Symphony 
Orchestra (SJ. 9.46 Words. 9.50 Tha 
Medium. 10.4S Jazz in Britain (S). 
11.15 News. 

RADIO 4 

6.00 am News Briefing. 6.10 
Farming Weak. 6-30 Today. 8S5 
Ths Week on 4. 8.43 Milas Kino- 

ton in the BBC Sound Archives. 9.00 
News. 9.05 Stan ths Week with 


LONDON 


f a Sport Billy. 9.50 V 
-Children of toe Rain 
10.45 Crazy Worid of 
,10 Little House on the 

12.00 Cockleshell Bay. 

Rainbow. 12L30 Super- 
LOO News with Peter . 
Hus FT Index. L20 
News with Robin 

Houston. \L30 “A Farewell to 
Anns" starring Hudson. 

Jennifer Jones. 3.45 World Cub 
*82. 

6J5 News. : „ ... 

6.30 Thames News with 

Andrew Gardner. Rita 

Carter. . 

74)0 Coronation Street 
7 JO “Rio Conchos" starring 
Richard. Boone, Stuart 
Whitman. 

9 JO Best of British: Father, 
Dear Father— Patrick Car- . 
gill, Natasha Pyne. 

10.00 News followed by Thames 
News Headlines. 

10.30 Worid in Action. 

11.00 World Cup *S2 Highlights. 
11.40 Barney Miller. 

12.10 am Sit Up and Listen with 
Mavis Nicholson. 

Because of World Cap cover- 
age programmes will be 
subject to alteration, 
f Indicates programme in black 
and white. 


to Const, lire Hill Strant Blues. 1U5 
am Company. 

TYNE TEES 

9.20 am Ths Good Word. 9.25 North 
East Nowa. 9 JO Hands. 9.55 Golfing 
Grants. 10J20 Cartoon Tuns. 10.30 
Bygonss. 11.00 Sesame Street, ire 
North East Nawa and Lookaround. 4.30 
Northern Lift. 10.30 North East Nawa. 
lire Champions. 12.00 Epilogue. 

YORKSHIRE 

9.30 am Ssaamo Street. 10.30 Jason 
of Star Command. 10,55 Worid We 
Live In. 1 JJO Moby Dick and Mighty 
Mightor. 11.40 Children of Hong Kong. 
11.55 Tha Undarsea Adventures of Cap- 
tain Nemo, ire Calendar 'News. 6.30 
Calendar. Em ley Moor and Balmont 
editions. 11.40 Late Night Drama. 

ULSTER 

ire pm Lunchtime. 3.43 Ulster 
News. 630 Good Evening Ulster. 1039 
Ulster Weather. 11.40 News at Bed- 
time. 


Richard Baker (S). 10.00 News. 10.02 
A Small Country Living. 1030 Daily 
Service. 10.46 Morning Story. 11.00 
News. 11.03 Down Your Way. 11.48 
Ad Hoc Cookery. 12.00 News. 12.02 
pm You and Yours. 1237 What Hoi 
Jeeves. 1.00 Tha Worid at One: News, 
ire The Archers. 2.00 News. 2.02 
Woman's Hour. 3.00 News. 3.02 
Afternoon Thestre. 430 Makars of 
History (2). 4.40 Story Time. 530 PM. 

6.00 News, including Financial Report. 
630 The News Quiz (SJ. 7.00 News. 
7.05 The Archers. 7.20 Start the Week 
with Richard Baker (S). 8.00 The Mon- 
day Play (S). 930 Kaleidoscope. 10.00 
The Worid Tonight. 1030 Science Now. 

11.00 A Book at Bedtime. 11.15 The 
Financial World Tonight. 1130 Today 
In Partientent. 12JOO News. 


ErstCY Blueprint 


PLANNED EFFICIENCY AND ECONOMY IN THE USE OF ELECTRICITY 




' * Y* . 

RALE 


\Yt-S 




. |TSl y 


jHk wMt 



By aiding two dectetaSowboikos and 
ni^cctnlralB toils existing oitfired heal- 
ing systenx a London council has cut 
onnall heating costs by at least £ 12,000 
a'ysar— ' ur 25 per cent And'the switch 
to a dual energy-- or bivalent— healing 
system has reduced fnd offl consurop- 
tion by SS per cent At the same time, 
Hadc^Borotirii CchbkSI hasthe assur- 
ance that ■should oil suppfy problems 
arise in the future, it wfll still have heating 
fcatita town hall and annexe buildiDga- - 
' The new electitaflowhcalfiES, of 240 
and 210 KV\f use. aff-pqak electrkay 
siqjpliedb^wBmmirini^tandymthe 
' xoomta^ And it was ia the use of 
aSpeak electricity that tbe council 
received an unexpected bonus. They 
ioitELlly adopted thte scheme far "reasons . 
of flexibility - and 'ml economy: But 
dectridly is gbiing than sawn^ in its- ' 


W1 


own. light; at the .off-peak xate> the new 
electric boilers supply heat more ■ 
dieaply than tbe existing ones, even 
though the* pbunril buys its oil: at 
preferential rates-Theheat produced by 
trfFpeak electridty is teored in tte. 
existing twin 40^J00-litre hot water stor- 
age tanks, and is used to pre-heat the 
town. bafl. ready- for the- next days 
occupation via toe existing system of 
radiators. Tie oil-fired boilers can be 
used to inject -further heat into toe 
system 'during -the day if Doncfitiaos 
demandiL 

In emexgehcies, toe off-peak swatch . 
can be owenidden to give .24~hour 
electric beating; simllaiiy the oil-fired 
boilers could take oyerindependantivif 
necessary Au electranic control system, 
xpstallsi as pari: of the scheme,, gKes 
grirWI ■ mfinmnant m the ertCTgy-savir^ 


process. It controls the pre-heat start 
- tinip, re gulates lwtfflr temperature in top 
storage vessels, and automatically con- 
trols daytime boQer operation so that tbe 
beating need is fulfilled precisely and 
•without waste. Time-switched overrides 
give flexibility to beatfhdmdual areas ctf~~ 
toe bufltSug at any time required out-, 
.side main woddng paaods. Hackneyii 
bivalent heating system, deind^Jedwfth 
advice from the Blectridty Council was 
instaled for a total cost rf£44v00C. giving J 
apayback period of under iburysars. 

This scheme is only one example of 
. toe role electricity can play in increasing 
heating oost effectiveness, A wide range 
of electric equipment is available at low 
capital cost which, working alongside 
ynirr existing heating systenx wni Tipfp 
cut energy costs and eliminate depenr 
/ ^dence on a sin^e aaogy source. 

Rir more infiarmation tide box no.1. 







■ :fl |f if 


Hhdtoeyh moS^aving^ctnE fiowhpikis and master control 5«rincasi|>rinstaEedin easting plant room. 


Heat pump economy 
foraU seasons... 


Tie TJKs largest commercial user of 
electric heat pumps recently rqjorted 
savings on beating of more than 60 per 
cent at two of its stores. And in their 
latest heat pump installations, even 
better results are being achieved with 
syst ems which reclaim waste heat from 
refrigerated display cabinets. 

"No other method shows such a 
favourable heating cosf says Keith 
Smith, in charge of engineering at the 
Key Markets supermarkets group. When 
such operating economies are consi- 
dered with the reasonable low capital 
and installation costs ofheatpumpg.it is 
■no surprise that Key Markets is fully 
committed to the systems for future 
heating and coofing a t all its stores. They 
plan on adding 35 heat pump units to 
tbelDO or so alreadyin operation. 

Key Markets are equallv impressed by 
the units' summertime performance. 
The same.equipment simply operates in 
reterse mode to provide coofing and 
xriake shopping conditions more com- 
fortable. ; 

Tie company already operates heat 
pump6 in 15 of its larger stores, and 
plans the same in five new ones in the 
near future. It is inthe laager new stares 
that the heat pumps are giving even 
better savings, bv redaiming waste heat 
from refrigerated displays. Normally this 
is too variable in temperature to be 
re-used directly but heat pumps can. 
upgrade and refuse all forms of inciden- 
tal heat This indudes warmth gener- 
ated by display lighting, andjby the 
shoppers themselves. Ventilation is no 









Markets: foDy committed to heat pumps 
at Chelmsford (above! and all their new acres. 


problem, the heat pump system can 
provide it together with beating and 
cooling in a singe unit This helps 
keep, capital and installation costs about 
3CT per cent below some alternative 
systems. 

The combination of economy and 
rorsatifity was what attracted Key Mar- 
kets as the size cf their new stores grew 
They especially needed air conditioning 
and high ventilation rates in areas such 
as canteens, bakeries, and meat and fish 
preparation areas. But whatever the 
ret^Qtagfiekl most laiger premises have 
the same need for economical and 
flexible year-round environmental con- 
trol. like Key Markets^ more and more 
firms are looking to electric beat pumps 
to provide it 

in all sizes... 

From Key Markets, the UK’s largest user 
ofbeat pumps, to the 43J5 square metres 
of the Leeway Outdoor Centre foBingley 
Yorkshire, is quite a jump in scale. Mr 
Lees small outdoors activities shop 
would be swallowed up in any one of 
Key Markets' superstores. What both 
owners have in common, howevec is an 
enlightened approach, to environmental 
control - both chose a heat pump 
installation to ensure comfortable 
shopping conditions all year round. 
Making the jump in scale is no problem 
for toe heat pump: its flexibility brings 
efficiency and economy within reach of 
users ofafl. sizes. 


In Mr Lees shop, a certain outdoor 
imageBappropnatethrm^ 
difficult to maintain in small low- 
ceilfnged premises. The heat pump 
maintains cool fresh co ndition s in 
summec even at peak business periods, 
with conditioned air diffused at a hlgh 
exchange rate. In cold weather toe 
system supplies heating by extracting 
and upgrading ambient heat from out- 
side air at vrav low cost This is backed 
up by reclaimed heat from lighting and 
other incidental sources including solar 
gains. Supplemental electric heating is 
progressively introduced by an outdoor - 
thermostat only when absolutely rteces- 
saiy The smaU air-to-air beat pump is 
roof-mounted and uses an ingenious flat 
ducting system to make the most of a . 
very fimited ceiling void 

Leeways small installation is proof 
that the principles of good retailing and 
energy management need not vary with 
the size of the operation. And with a 
wide . range of heat pump systems 
available, the principle of economy and 
effira enry if offer s wfTl npt vary eith er; tha 
satisfaction shared by users right down 
the scale is pro of of that. 

Fbrmore information tick box no. Z. 






Ii iigpgii 


leeway: proving the heat pumps efficiency 
for small premises. 


Bease send me copies 

.! ' of leaflets /^formation. 

■I on the fonowing topics. 
| Please tick as appro- 
■ priatedJKonJy). 

□ 1 Bivalenthealing 
| □ 2. Heal pumps 


Address. 


T fruuluiri 


2BPf5 


Ftease send toe oouponto: 
TheHaaraa^Cotmal, 

Tllfi'H TUHlW'g l flflntlft, 

PO Box 2, central Vtfey 
MrfidlffSgX- 


PLAN* 


WE HAVE THE POWER TO HELP YOU 

TheEtectrktyComctf/Engja/riaiidVi'bles 








J.U 


r inaiicitii x lines isuoijuiiy^ a iliy o • iafa2 


MANAGEMENT 


EDITED BY CHRISTOPHER LORENZ 



Harry Arfdbon: substitution of im ports rccopihcd by a Government award 

How a tube bender took 
a turn for the better 

Ian Rodger explains why Addison Tool exchanged importing for manufacturing 


■AS THE recession in industry 
deepened early in 1980, 
Addison Tool, a small private 
UK importer of tube bending 
1 machines — used mainly to make 
exhaust pipes for cars — pushed 
ahead with a surprising strategy 
to sustain its business. 

It decided to manufacture its 
own exhaust pipe machines 
rather than import them, with 
the aim of exporting a signifi- 
cant proportion of its own 
output. 

Two years later, group turn- 
over is up by about 10 per cent 
to about £5. 5m of which £2m 
comes from manufacturing. The 
company is breaking even 
despite having invested £ljm 
on development and in setting 
np a factory. Exports already 
accoum for about a third of 
sales. 

“Our business would 
normally have gone down 
during the recession.** says 
Edward Addison, the chairman. 
“All our increase in turnover 
has come from the manufac- 
turing side." 

This is an astonishing 
achievement at a time when 
Britain's machine tool industry 
is increasingly giving ground 
to imports. The value of 
machine tools imported last 
year was £225m, 56 per cent 
of total UK consumption, com- 
pared with 30 per cent a decade 
earlier. 

Addison’s success was recog- 
nised early this year when the 
Government's Small Business 
Bureau selected it for a new 
award recognising its success in 
import substitution. 


The key to the company's 
success lies mainly in its long 
experience as a distributor and 
thus its detailed knowledge of 
the UK market. Addison has 
been importing tube bend- 
ing machines for 23 years and 
the directors* decision to plunge 
into manufacturing was based 
on fheir growing awareness in 
the late 1970s of demands in the 
market that were not being met 
with available products. 

In particular, there was a 
need for a reasonably priced 
computer numerically controlled 
machine to make exhaust pipes. 

Rapid set up 

Partly because each car model 
takes a different exhaust pipe 
and partly because these items 
are awkward to store, average 
production runs of exhaust 
pipes for the important replace- 
ment market tend to be small — 
less than 100 in some cases. 

Thus, setting times on manual 
bending machines takes up a 
very high proportion of total 
production time. CNC machines 
permit rapid set up — merely by 
changing the programme — and 
high levels of accuracy. But 
prices for CNC machines have 
been well beyond the means of 
many of the smaller makers of 
exhaust pipes for the replace- 
ment market. 

As always. luck and timing 
played their parts as well. Late 
in 1978. Addison was becoming 
unhappy with Eaton Leonard, 
its main U.S. supplier of 
machines. In December 1978, 


a UK tube bending machine 
maker. Power Dynamics, went 
bust. Addison was asked by the 
Receiver to take over the busi- 
ness. in which the National 
Enterprise Board had held a 
one-third stake, but decided it 
would not be worthwhile. 

However, it did take on four 
of Power Dynamics* engineers 
and their project to develop a 
CNC machine to bend very- 
large pipes for shipyard, petro- 
chemical and nuclear plant 
applications, although Addi- 
son's mam interest remained in 
vehicle exhaust pipe machines. 

The challenge was to develop 
a CNC machine at a reasonable 
price. Addison found a spe- 
cialist engineer at Quinton 
Hazel I. the automotive sub- 
sidiary of Buymah Oil that made 
its own exhaust pipe machines. 
Under his leadership, the 
group’s engineering team soon 
concluded that advances in 
microprocessing and the de- 
velopment of non-volatile 
bubble memories made a low 
cost CNC machine possible and 
so a development programme 
was begun. 

Meanwhile, a large CNC pipe 
bender project developed by the 
company was succeeding and 
the machine was demonstrated 
at a trade show late in I960. 
Because of the recession, sales 
have been slow. Only five, 
worth from £120.000 to £250.000. 
have been sold so far. But 
Edward Addison is particularly 
proud of one order from the 
French nuclear plant contrac- 
tor, Entrepose. 

■‘The French don't buy any- 


thing British unless they abso- 
lutely have to." says Harry* 
Addison, the managing director. 

Then last July. Addison's CNC 
exhaust pipe makers were in- 
troduced. At £33,000 apiece, 
well below the price of the 
nearest competitive machine, 
they have been an immediate 
success. Over 30 have been 
sold so far and the group has 
orders for many more. 

Addison spent about £lm 
on the development of its two 
machines, and another £im to 
set up a factory' at Preston. The 
current order book is worth 
about £lro, sufficient to keep tlje 
factory busy for the rest of 'the 
year, and so the company is now- 
spending another £\m to in- 
crease potential capacity by 30 
per cent. 

Addison's machines are al- 
most entirely British made. 
About 60 per cent of the com- 
ponents are bought in. but only 
3 per cent are imported, mainly 
electronics from the U.S. 

The company is now working 
on widening its range of bend- 
ing machines. One new model 
is being developed for precision 
bending for the aerospace, auto- 
motive and hydraulic industries. 

The group also aims to im- 
prove its financial performance. 
Edward Addison expects the 
group will make a small profit 
in the second half of this year 
and then make about £|m next 
year. 

That was the level of profits 
Addison was making in the late 
1970s. But that was before it 
began manufacturing. 


Profits: the great misconception 


BY ARNOLD KRANSDORFF 


MANAGERS are obviously still 
failing to educate the public 
about the realities of the busi- 
ness world. 

•Most people think a company 
makes far more profit from its 
products than it really does. 
And among the most misin- 
formed are the professional 
classes, including managers. 

Across Europe, the public 
over-estimates corporate profits 
by up to 10 times. Only about 
I* per cent correctly estimate 
manufacturers’ margins on cer- 
tain products. 

These startling figures 
emerge from a new survey car- 
ried out for the International 
Telephone and Telegraph Cor- 
poration and p ubli shed in the 
latest issue of ITT’s ** Profile " 
magazine*. The results have 
prompted the head of ITT in 
Europe to call -on industry to 
improve its communications 
skills. 

It hopes that national em- 
ployers* organisations -will be 
stimulated into doing something 
about it. “ No one company can 
take this on by itself," it says, 
though it does intend to start a 
campaign through its 30-odd 
company newspapers across 
Europe “ to inform our 180.000 
employees of the economic 
realities of business life. Where 
we go from there depends on 
what reaction there is from 
others." 

The study was carried out by 
Gallup in France, Italy. West 
Germany, Spain and the UK. 
In each of these countries 
2 bout 1.000 people were asked 
to estimate a manufacturer’s 
profits after tax as a percentage 
of the sales price of three items 
— a stereo tape recorder, a 
typical basket of supermarket 
goods and petrol. 


SO 


CORPORATE PROFffABlLtTY.:hovf the pubfcr sees if 

X profit pyoaxrf 


pnBmtino 
ramdir 
(TOO worth) 



JBMM -RANGE .GERMAN? [UEf - SMN 
AtbEefcariholionoFiNf profits (averse per country) _**•>*> 


Taking the example of the 
tape recorder, the actual net 
profit margin for a manufac- 
turer of this product is roughly 
5 per cent, although it Is dif- 
ficult to generalise across 
borders. Yet the average view 
in the UK was that the margin 
was 38 per cent There was . 
little difference in this estimate 
across the age spectrum, or 
among people who were work- 
ing or unemployed or across 
class barriers. And .among. the 
professional and managerial 
classes, the average . estimate 
was little better, at 33 per cent 

Rather than hazard a guess, 
more than a .fifth' of respon- 
dents admitted that they did 
not know. 

The estimate throughout 
Western Europe varied little: 
32 per cent in France and 33 


per cent in West Germany. In 
Spain and. Italy, the estimate 
was higher, at 37 per cent and 
42 .per cent respectively. . 

Taking all five countries, 
between 13 per cent (Spain') 
and 18 per’ cent, (the -UK) of 
people thought that the -margin 
was between 50 per cent and 
59 per cent. - 

The general public held a 
similarly unrealistic view of 
net profits in the food industry, 
which are probably less than 5 
per cent. . 

West Germans thought the 
margin was 2i- per cent, the 
British 27 per cent and the 
French 29 .per- cent Italian 
and Spanish estimates were 29 
per cent and 31 per cent re- 
spectively. 

The public' was equally wide 
of the mark over petroL 


Spaniards thought the profir 
margin was 42 per cent, t hr* 
French 37 per cent, the British 
26 per cent and the German 
20 per cent 

The- integrated nature of 
activities in most oil companies 
jnfe a realistic assessment of 
margins- difficult, but the most 
likely position is feat petrol 
sales alone incur losses at the 
pump. 

Accepting that petrol is a 

special case, the most obvious 
conclusion that can be drawn 
from the study is that the 
public is grossly unaware of 
business realities. 

Says John Cmlfoyle, presi- 
dent of ITT Europe: " The 
inevitable reaction of business- 
men when confronted with 
these research- results is one of 
disbelief. 

■ “If- we refuse to recognise 
the simple fact that business in 
general has done a lousy job of 
communicating the economic 
realties, we wHl never under- 
stand the difficulties which the 
misconceptions create. 

- “We are all frustrated by 
our apparent inability to get 
the public to understand that 
profits are necessary to permit 
investment for the future. Calls 
for increased investment; belt 
tightening and justifications for 
employee layoffs will win little 
sympathy, acceptance or under- 
standing, from a public whose 
conceptions are so far removed 
. from reality. 

“It is up to the business 
community, to recognise that a 
problem exists and do some- 
thing about it." 

• “Profile " 27182. ITT Europe 
Inc., - Avenue Louise 480, B-1050 
Brussels, Belgium. 


Management 

abstracts 

Who wants “flatter hierarchies" 
anyhow? J. W. Hunt in 
London Business School 
Journal (UK). Autumn 81 
Sees signs that the move 
towards industrial democracy 
has ground to a halt; insists that 
this should not surprise anyone 
— other than behavioural 
scientists — since democracy is 
alien to industrial organisations, 
in which the elite need the 
hierarchy to remain the elite, 
the upwardly mobile need the 
hierarchy so that they can 
climb, and the majority know 
that, if one hierarchy is dis- 
mantled, another -will take- its- 
place. so prefer to huddle 
together for security. 
Diversification in the chemical 


industry. H. J. Schindler, in 
Journal of International 
Marketing and Marketing 
Research (UK), Vol 6 No. 3 
Distinguishes types of 
diversification, and lists objec- 
tives; considers in detail a 
procedure for planning and 
implementation; presents an 
evaluation sheet for a new 
product idea, and lists aspects 
to be considered when carrying 
out a market survey. 

Design Education for Engineers. 
C. R. Chaplin and D. J. Beard 
in Chartered Mechanical 
Engineer (UK), Jan 19821 
Following a discussion of the 
training of engineers in pro- 
duct design, reports cm collab- 
oration between Reading Uni- 
versity and— Black and Decker 
(makers of electrical tools) in 
an undergraduate design-study, 
project.. ■ »■• ■. 


: Planning for Uncertain Energy 
Supplies. | L G. Christopher 
and - others in Business 
■ (Ufa. A,), Nov.-Dee. 198L 
With special reference to the 
1973 Arab oil embargo, dis- 
cusses effects of- uncertain, 
energy supplies . on , operating 
costs and -investments; reports 
on^a. survey of the energy, ptil}- 
des/pktris of North American 
and UK companies, and outlines 
the impact of an energy crisis 
on various industries. 

Expatriate Employees. D. W. 
Kendafl in Business Horizons 
(U.SJL), Nov.-Dee. 1981.. . 
Identifies adjurtments that 
usually have to be made by em- 
ployees (and .their, families) 
when they are transferred over- 
seas and when they come home; 
suggests ingredients of a com- 
pany policy on expatriates, e.g. 
ensuring -that “fee personnel de- 


partment includes people who 
have lived abroad. 

Assessing Product Sales. W. T. 

Cummings and J. M. Daley in 
■Business (UJS-A.), Nov.-Dee. 
'1981. 

• Extols the virtues of segment 
tid analysis and product-portfolio 
analysis, used in tandem, for 
.examining the performance of 
particular products and com- 
paring sales growth rates: 
ex p lain s the techniques, and 
presents a glossary of terms. 
These abstracts are con- 
■ densed from the abstracting 
journals published by Anbar 
Manag ement Publications. 
Licensed copies of the 
original articles may be 
obtained at £250 each (In- 
cluding VAT arid P arid' p; 
gash with order) from Anbar, 
PO Box 23, Wembley, HA9 
8DJ. 


TECHNOLOGY 


BY ALAN CANE 


Continuous casting of non-ferrous metals 

Tiny furnace to suit 
the bullion dealer 


BY MARK MEREDITH, SCOTTISH CORRESPONDENT 


A SIGN of "nod breeding in 
the steel industry is iu use 
of the efficient heat and labour- 
saving method of continuous 
casting. 

But thic system, -o essential 
?n the survival of »he western 
world's >ieel factories w;t'n 
?mw:n? international ever- 
suppiy and competition, has 
made’ much less impari un the 
production of other metals. 

Conti minus ca>tmx M _ a 
sir.zlc process, which takes 
molten metal from o furnace 
and casts it siraighr :nto basic 
shapes. This by-pass*?* a stare 
in the traditional method in 
which molten metal is first 
formed into innoto and ‘hen 
later remedied to be cast into 
sheprs. 

The production demand? of 
the non-ferrous metals are very 
different from steel. The** 
metal*, are worth more and pro- 
duced in smaller quantities. 

Casting brass at £200 a tonne, 
bronze at £600 and more valu- 
able raetsls such as sold and 
«i‘ver require controls which 
are much tighter and r,n a scale 
f:J production much smaller 
than steel. 

Vet an Edinburgh company 
hc.j eves rhar continuous casting 
can be applied beneficially to 
these metals. 

Opera tins from a cluttered 


office above a building society, 
the firm has produced a furnace 
roughly the ?iz<? of a washing 
machine which :s suited to the 
special requirement of precious 
meial? and alloys. 

Production i* simplified tr. 
:f.e point where raw metal 
dropped :nto a hole in the top 
and finished, cast metal r-merg- 
;r.u from a die a; the Iron*. 

Mr John Even, the managing 
director of 1. E. Ew*n. ha- 
dev duped an idea created by 
hi; father for continuous cast- 
ing in rwn-ferrou® met -its 

Hi; furnaces are aimed at 
“he .secretive world of the 
bullion dealer who wants a tidy, 
clotely con ■rolled, all-in-one 
operation for s 'mall work' hop. 

They are aJ«o designed for 
mints producing strips our of 
which coins can be punched. 
Rectntiy the company has 
begun to market the furnace 
directly to mines where small 
3 mounts of precious m el a is are 
found mixed in with other ores. 

The furnaces are specialised 
enough to be made one at a 
time and usually on site. Mr 
E-.vens small office »s all there 
is to see of his company. 

The technical problems for 
producers of non-ferrous metals 
in the past have included the 
large size of existing equip- 
ment. Furnaces hold only one 
tonne of metal and are really 


only economical when procur- 
ing 1.000 tonnes a year. 

A precious metal producer 
might measure his output at 
something like a ten’h of tha\ 
The metal i« often produced 
ounces ar a cme. 

Leakage h.i- rraditicsa’l” 
plagued production J!***s: 
seep.- out into nr nor pirs of 
casting machinery ar.d when 
ounce; count, there can often 
be j con>ider3bie difference 
between what goes in and vr.it 
comes out. 

Because clay center* :* -rsed 
in the manufacture of fee 
crucible in which the nt-tts! is 
melted, traces of rhe me-sL esn 
he absorbed into the croetbie 
wall Evaporation can z’.&t 
reduce the quantities of some 
metals in open cast fyvems ex- 
posed to the air. 

Finally, conventional produc- 
tion sy- terns using rr.re-'i ard 
'eparare heating sy-rem-. re- 
quire at least four rgcr. 

Material and labour are 
high. 

Xlr Even believes h:s fur- 
nace culi out many of ‘.'tie 
problems. 

The dimensions o: toe Ewe.n- 
C35t 100 are tailored to fee 
need.? of a company dealing 
small amounts of moral. r hoid? 
only H>0 kgs at a time. 

Graphite hearing earner'' 
can create temperature? o: 


TOP HAT 


.CRUCIBLE 


■cast CONTIfffUS 
CASTING FURNACE 


STER CASHS 



L E. Even's casting furnace Is only the size of a washing machine 


*o ISO*) Centigrade. Metal can 
melted down quickly — SO kgs 

:r. TtsmtitC'i. 

Heating and muring metals 
•*rto alloys or hadling a single 
metal rvpc takes place in one 
■ini- To ensure against leak- 
ages. fee cruc:blc is made from 
a smgie piece of graphite. The 
d.e made from the same 
material and slotted trrto the 
crucible. 

The use of non-wetting 
graphite eliminates any absorp- 
tion of me’ai. 

The small producer does not 


reed elaborate conversion to his 
plant such as special founda- 
tions to hold she small fur- 
naces. 

The furnace can also be oper- 
ated by one man on a single 
shift. Machinery can be left in 
a stand-by position overnight 
or at weekends. 

Tne metal is stirred by the 
injection of nitrogen into the 
crucible. 

Mr Even reckons his furnace, 
using a maximum of 80 kilo- 
watts. can run at about £1 an 
hour. 


An ingenious system of mov- 
ing coding probes prolongs 
the life of the graphite dies. 
The system, developed .at the 
Timex factory in Dundee and 
incorporated in the Ewen fur- 
nace. allow the operator to 
adjust and vary fee point at 
which the metal “freezes’* in 
the die. This is fee point at 
which fee wear on die die is 
at its most severe. 

More information from L EL 
Ewen, 12 Davidson’s Mains, 
Edinburgh. 031 336 5020. 



Computer system to monitor London's public telephones 

BT scheme to keep 11,000 Buzfeys ringing 


THE muSTRlTION of 
hunting for a working public 
telephone box in London 
could be eased after the 
introduction this week of a 
computer system to monitor 
Ihc capital’s 11.000 public 
telephones. 

The main use of the system 
will he to ensure that enm- 
hoxes are emptied — as 
frequently as six times a day 
— and to report jammed, 
dirty or damaged telephones. 

British Telecom believes 
iliai its new computer system, 
called “All Chance" will 
sate about £.»m a year and 
re du«ro riramaiirallv the 


number of telephon*- kiosks 
out of order because of 
overfull coinboxes. About 
400 kiosks a day do no! work 
for this reason. 

All Change was a joint 
project between British Tele- 
com and Chapman Cafe 
Processing, which developed 
the computer software and 
the special cuia coanting 
mechanism. 

The computer system car. 
deal with all kinds nf boxes, 
including llie nrw prrv- 
button el er ironic payphones, 
themselves competer control- 
led. which are programmed to 


Indicate when their coinboxes 
are three quarters fulL 

The system is based on 
minicomputers which keep a 
record of each kiosk, its tele- 
phone number, the type of 
equipment, who is responsible 
for cleaning it. and, how often 
the cash is collected. 

•U collection time the Tele- 
com collector marks a special 
card for each kiosk, noting its 
condition and other informa- 
tion ami sends it with the 
sealed cash container m the 
change headquarters In 
West London. 

This information is tod Inin 
fe* - ’ computer while Hie money 


is automatically counted and 

bagged. 

The enormity of the prob- 
lem in London is highlighted 
by the fact that the daily coin 
intake of all London’s pay- 
phones is something over 
eight tons — amounting to 
about £380,009 a week. The 
CCP system is able to process 
ail the money overnight. The 
coins arc counted automatic- 
ally at a speed of over 600 a 
minute. 

At the same time the com- 
puter system produces 
siatisticai trends for each 
phone box and works out 
schedules and iastniclinos to 


empty and repair the coin- 
boxes. 

CCP took only six months 
to design and instal the new 
system compared wife other 
companies’ estimates of three 
years. Workers at CCP 
worked through fee wight 
during fee period to complete 
fee Job. 

Chapman Cash Processing, 
CCP, is a small British com- 
pany set np last year wife 
funding amounting to 
£250,000 from Venture 
Founder Capital, a VS. 
business investment company. 

ELAINE WILLI AM 5 


Exhibition 

Mesucora 
for control 
automation 

THE EIGHTH Mesucora exhibi- 
tion and congress will take 
place at the Porte de Versailles 
exhibition complex in Paris 
from December 6 to 1L 
Held every three years. It is 
stIH one of the few truly inter- 
national events covering 
measurement, control systems 
and automation. 

It win be boosted this time by 
the coincident staging of 
Physique 82. the 70th French 
Physics Exhibition, and also of 
Elec, the electrical equipment 
show. During fee same period 
there win also be a . seminar 
arranged by the International 
Federation of Automated Con- 
trol (IFAC). 

More than 1,400 organisations 
will be exhibiting at Mesucora. 
Naturally enough, fee French 
will have a strong presence 
with 366 stands, followed by fee 
U.S. (334), West Germany 
(149) and the UK (142). There 
will be 24 countries represented 
altogether. Including four from 
fee Eastern European Hoc led 
by the USSR and also from 
Japan and Israel. 

The fevent will cover virtually 
every aspect of measurement, 
scientific and industrial instru- 
mentation. process control and 
automation on - a site covering 
26.000 sq metres: The Mesucora 
Commissariate is at 40 Rae dn 
Colisee, 75381 Paris (Paris 359 
1030). . 

Telex 

Transtel’s 
new deal 

JULY 1 marked the moraenl at 
which it became possible' under 
the 1981 Telecommunications 
Act to supply telex machines 
privately on a sale or. rental 
basis. 

It was also fee day on which 
Transtel fee Slough-based ^elec- 
fironic telex machine maker, 
struck up an agreement with 
Telephone Rentals of Milton 
Keynes under which fee latter 
win offer fee former’s machines 
on rentaL 

Keith Rushton, TrusteVs 
manag ing director, describerthe 
move as the first real oppor- 
tunity since fee act' received 
Royal Assent " for fee business 
user to break out. of fee grasp 
of the British Telecom ■ mo no 
poly.” 


1 John Evans &. assoc cml 


Serving the 
World of Industry 


Nmsnimmim 

IiJmIiM B b^hh w a fiiMBltMh 

r* — m — Wt — i_ OriMjZv 

ijMStaa. yko ounj 

C j u mf mtrr Ir aiwi wg 

.MUSnrirlcrimqgSdMNl 

Contact; 

John Eras a associates cm 

SystKna House, Qrnat Hampton Street, 
BfcninghanJIlBMQ. 




Welding 

Robot which 
learns 

BRITISH Federal Welder of 
Dudley in the West Midlands 
has announced its latest robotic 
resistance welding system. It 
incorporates a basic “ Fedman ” 
S series robot with options of 
up to six axes, CNC control with 
teach facility and programmable 
welding controls. 

British Federal says feat it 
offers an alternative to fee arti- 
culated arm. system while the 
flexibility of the design allows 
** C ” type gems from 600 to 
1 / 200 mm reach to be employed. 
Positional accuracy of plus or 
minus 0.4mm is achieved by a 
dc closed loop servo-drive. 

British Federal is on 0384 
54701,. . -. 

Instruments 

New digital 
analyser 

A DiGITAL signal analyser for 
use by mechanical and control 
system designers has been 
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0525 382444. . 







Architecture/ Colin Amery 


The Beggar's Opera/Cottesloe 


By my standards, liris' is a T ’ ■ -« 

gi&SfcEssB New ideas for Kew 

there are enormous- eompensa- 
Oous for all those forced to 

lecture ot the- past 20 years "has more tolerant view of the period 
frSJ i? 8te : the Clt y t0 be toe worst architecture in of experiment that we are nre- 

^ scale ^ bistory of the world." He senfljTrajoying. To change itis 
Sn^e J252S5 01 *H d **L f ** 1 ** was a .matter necSsa^ tV^wSetkS 

s* 55S? eS “7 ,L i- °* aesthetics; it was more a was free to cany out Maexcit- 

t ° real ^ e bow question of the art of architect mg experiments in England 
™2fJ? done for the ture not only reflecting but also becaiueof a tolerance that 

3 03 b w mean are celebrating a civilisation “on exists nowhere else. It is sad 
standards of ‘*5* brink of setf-destnwtion all that his wit and learning do not 
S? w?kA^ d untepaSSes and £e way.. ; from- to let him extend tolerance tof the 

tte token improvements m Minsk.", struggles of the uncertain archi- 

sheets like Oxford Street. tlwierttandahly in an archi- tectsof today 

**** 5* ^ M 5 not Practised for A more 1 tolerant and reason- 

2“2®, ™UK scarcely 30 years and who resigned from able approach to' antoitectnre 
ridS? «£» *5? •ffr m f .cbfef architect to was to he found later in the 

!^IL New Town because of week .when the results were 

COTtres of European shopping, frustration with bureaucracy, announced of the Government’s 
Struggling through the West IaxbeSciii had fittl© to .sky' about competition to find a design for 
22 » “• renaruscent of a the , fiuhxre of toe v. Modern a L bdE to Kew 
steuny afternoon in Port Said Movement to change society. In- Gardens. There was a huge 
22Li ~L, waik ibrougb. an stead he_attscked- the .recent entiy: 370 architects suJk 
an cte n ^. c ^ , 5 al * , , : movements towards what be mitted designs ftn- a building to 

2?®* “toanivestite .arcfcitec- house the Reference CoDectien 
™r ^^ eas “ Bert_ ^ . r recognition of wbat with its connected offices, 
nold Lubetkin, who has been he considers vernacular revival horary and public exhibition 
out or the architectural game -he saw as danger signals. No space. The site , for the new 
for the last '30 years, took one would disagree with this old building is norfli of Broadwalk 

f£lS ta SL2L Cjd,e -J > . “a^tor that what archi- . wfto Kew Palace dose by to the 

attackahnost everyone as- he tectnre partly consists of is west. Almost on the site is the 
received toe long overdue " classical calm, order, Jogrc and utOe building by John Nadi 
*9^ Gold Medal lucidity,** but it Is afcb: about which w>m» from Buckingham 
for architecture. inspiration, romance and. an in- Palace and is now the Aroid 

He called for a return to stinctive understanding '• Of 
scientific _ rationalism and de- beauty. ■ Kew Gardens has been 

piored the current mood of One generation of architects fortunate in its architects. Sir 
acarduc ^ experiment in archi- will rejoice in this restatement William Chambers and Deeimus 
lecture. Lubetkin agreed, with of old values by a former revo- Burton both did good work 
Norman M ai l er, that the archi- hrtionary; others will, take a there and particularly 



Conservatory qualities of the new exhibition 
building at Kew Gardens by competition 
winners Manning and Clamp 


had an understanding of the 
spirit of the gardens. The gar- 
dens as we see them today date 
fr o m both the mid-eighteenth 
c entury and the mid-nineteenth 
century. At both stages Kew 
embraced both buildings and 
landscape. It is a wonderful 
■ example of what the English 
architectural genius is about 
(which Mr Lubetkin win never 
understand), an awareness of 
■ toe rational and an infusion of 
the picturesque. Botanical 
science is conducted at Kew in 
a place that at the same time 
demonstrates the magic of 
plants and trees. 

To find a winning scheme 
from the entries to this Import- 
ant competition the three wise 
men: Lord Gibson, Sir Philip 
Dawson and Professor Bell 
(Director of the Royal Botanic 
Garden), went to enormous, 
trouble to advise the Secretary 
of State. 

> jb - They have done a sterling job 
V”S and went to the appropriate 
"* ^ lengths of examining the short 
list of schemes on the site. This 
OU was a single stage competition 
qjj and the winner. Manning Clamp . 
and Partners of Richmond, has 
produced an imaginative and 


promising addition to the subtle 
landscape of the gardens. Per- 
haps it was because it is a local 
company, or because it recently 
restored, the. Temperate House, 
that the winning scheme shows a 
love and knowledge of the 
gardens. 

The advisor’s remarks about 
the competition are worth 
noting. They mention their sur- 
prise that so few of the entries 
were able to catch the spirit of 
Kew. “ Many schemes were too 
hig and 1 complicated, lacking 
calmness and simple 
elegance . . . they could have 
. been community centres or 
schools arid would have 
diminished Kew Palace.” They 
"also make an. important point 
. about single stage competitions. 

It would be useful to juries 
if they could meet and discuss 
(without prejudice) the de- 
signers of the short list of en- 
tries. While this would remove 
any anonymity, it would also 
help to clarify proposals. 

The winning scheme is com- 
mended for-its integration with 
' the landscape. Much of the 
braiding is underground or con- 
cealed by banking, water and 
' trees. At the 'Same time, the 
architectural elements follow 
the Kew tradition of' being 
largely curved and .glazed and 
conservatory - fike. Manning 
Clamp and Partners carefully 
separated the public and private 
parts of. the scheme. 

In the second and third prize- 
winning schemes the approach 
was far more that of making an 
architectural statement. The 
second prize winners, Liverpool 
architects Colin Leirik, Nicholas 
Snslak and David King, pro- 
duced a subtle piece of geometry 
— two intersecting pavilions of 
sbarplyonefled planes. The 
third prize went to a large spiro- 
graph dome made of plywood 
and stainless steel by architects 
in London, Jones and Dennis. 
This was by far toe boldest solu- 
tion — a my dear concept 
with tiie domed building stand- 
ing up on a mound and sur- 
rounded by a moat The judges 
were, I toinfc, a little frightened 
by ‘the scale of the dome in toe 
gardens, although the idea puts 
it into toe Kew pagoda class. 

Tlie results of this competi- 
tion will be exhibited at toe 
Banqueting House in Whitehall 
with a selection of the schemes 
that did not reach the finals. 
The exhibition win be. on show 
in late July. I hope that the 
designs can also be shown for a 
while at Kew and that we can 
also see toe work submitted by 
several of toe most distinguished 
firms in the country which failed 
to win. 


Michael Coveney 


"The good men do is oft 
interred with their bones " and 
I have long thought the same to 
be true of The Beggar's Opera. 
The biggest theatrical bit of 
the 18th century started a -vogue 
for ballad opera that was killed 
off 10- .years later (in 1737) 
by the Lord Chamberlain’s 
licensing act It was a 
dangerous genre of moral inver- 
sions, scathing satire and 
street music. 

No revival' can nowadays 
make much of toe attacks on 
the government, the allusions 
to the informer Jonathan Wild, 
the rivalry between Walpole's 
wife and mistress invoked in 
the warring' arias of Polly 
Peachum and Lucy Lockit 
What can be achieved, and is 
achieved in Richard Eyre’s 
beautiful, smokily Hogarthian 
production for toe National 
Theatre, is a free flaw of ex- 
pressively emotional content be- 
tween toe brief musical items 
and toe spirited dialogue -and a 
coherent colourful picture of 
Newgate - -society where the 
transaction of a life is as casu- 
ally undertaken as the sale of a 
piece of cloth. 

There are many -precedents, 
from Linley and .Addison to 
Bliss and Britten, for adapting 
the. original score, for which no 
orchestral parts survive. The 
great virtue of Dominic Mul- 
downey’s arrangements is two- 
fold: the monotonously pre- 
dominant triple time of each 
snippet is cleverly disguised by 
interesting rhythmic variants; 
and toe threadbare tedium of 
the traditional fiddle and 
harpsichord accompaniment 
quite banished in toe in- 
geniously deft colourations for 
clarinet, mandolin, guitar, con- 
certina and psaltery. 

Nor is there any of the usual 
embarrassment (as in toe last 
Lyric Hammersmith revival) of 
modern singers caterwauling in 
a forgotten jdom. Paul Jones is 
a splendid. Glaswegian Mac- 
heath and his lovers are 
spiritedly played and superbly 






afr'A sjl 


mmm 

tefls 








i:;- 5 J 

v ‘I 










Paul Jones, Belinda Sinclair (centre) and Imelda Staunton 


sung by Belinda Sinclair and 
Imelda Staunton. This trio in- 
vestigate all the emotional 
corners of the tale with a 
natural aplomb whether acting 
or warbling or. as is usually the 
case, acting and warbling. They 
are well supported by Harry 
Towb and. especially, David 
Ryall as the paternal repre- 
sentatives of interlocked, 
corrupt judicial interests. 


There is nothing remarkable 
now about the dramatic moral 
of the destitute being as 
craven ly dishonest as the rich, 
□or does Mr Eyre's production 
bother to quarrel with the per- 
functory conclusion. 

John Gunter has designed a 
wooden structure with upper 
level that is inventively 
inhabited by gamblers, whores 
and peering gaolers. There is 


Stravinsky/Cheltenham 


Max Loppert 


Nash Ensemble/Wigmore Hall 


Andrew Cfemeivts 


It lias taken nitie ■ montos, 
since the first performance at 
last year’s Huddersfield Corn- 
temporary Music Festival, for 
Harrison Birtwistle’s clarinet 
quintet to reach .London.. It 
formed the centrepiece in toe 
last of the. Nash Ensemble’s 
short series of summer concerts 
in toe Wigmore Hall on Satur- 
day. The Huddersfield premiere 
was given by Alan Hacker and 
The Music Party, who commis- 
sioned the. quintet; this time toe - 
clarinettist was Antony pay, a 
less astringent but equally In- 
cisive player who Was notably 
more successful in focusing the 
low-register writing in the work. 

The clearer outlines of the 
clarinet part, as well as the 
greater security of the Nash 
strings, gave this performance 
a much crisper profile. The first 
encounter with the quintet was, 
for this- listener at least, per- 
plexing; not so much in its finer 
detail which throws up familiar 
Birtwistle gestures, but in its 


topography — in the ways in' 
which statement and develop- 
ment are mangled and inter- 
connected; • 

Now at least some of toe con- 
nective tissue can be teased out 
The long-range tonal plan is 
also dear: a work that never 
strays far from a pitch centre of 
p and which draws around it' 
other pitches to set up a kind 
of hierarchy. 

Individual blocks of material 
and their varied restatements 
stock more firmly in toe mind: 
clarinet -lines that recall but do 
not behave like toe non-retro- 
grad able melodies of Messiaen; 
a clarinet melisma that seems to 
have come straight out of Le 
Sucre du printemps, a pawky, 
constricted . tune that surfaces 
once only io disappear for ever; 
intricate webs of sliding, shiver- 
ing strings through which the 
clarinet must pick its way. 

In a programme of chamber 
music— around it on Saturday 
the Nash grouped a Haydn flute 
trio and toe Schubert octet in 
typically " boisterous accounts 


that carefully balanced style and 
wit — the Birtwistle was almost 
discomfiting. 

The title is accurate but 
deceptive, .for this clarinet 
quintet is descended from 
laager-scale works in toe com- 
poser’s output,, from Melen- 
colia I, for clarinet and string 
orchestra especially; its gestures 
and toe open-ended processes 
look towards those bigger can- 
vases. If its shape and 
manner of growth remain 
elusive, it is certainly a major 
addition to toe repertory and a 
work that win repay many fas- 
cinated rehearings. 

- ★ 

Six days earlier, the second 
concert in the Nato’s series had 
included two recent works by 
British composers written, for 
the group, by Nicholas Maw (his 
flute quartet) and Simon Bain- 
bridge. Bainbridge’s Voicing for 
piano, wind quintet and string 
quintet, was commissi oned for 
toe series. It is an attempt to 
merge such a heterogeneous en- 
semble into **one homogeneous 
sound world where no solo in- 
strument predominates." 

The result beSSnar by suggest- 


ing Steve Reich, though without 
the “process’* of a work like 
tained by a regular thrumming 
pulse, toe ensemble builds a 
thick texture by 'overlap and 
superposition and the tempo 
moves through several gears 
until the texture finally dis- 
solves into a mass of highly 
decorated solo lines after the 
manner of the trumpet and 
piano flares in Petrushka. 

The change from one “verti- 
cal" kind of homogeneity to 
another that is “horizontal" is 
momentarily effective, but for 
all its canny textures the piece 
seems unfinished and inconse- 
quential. 

Maw’s flute quartet is alto- 
gether more satisfying, though 
still problematic. There is 
certainly weight in the pensive, 
central slow movement weight 
that is happily denied by the 
frothy, Haydnesque finale; toe 
first movement a lazy pastorale 
mostly with darker episodes, is 
less sure-footed. As a work 
intended for the Nash Ensemble 
and especially for the group’s 
flautist. Judith Pearce, it is, 
however, perfectly judged. 

Muric for 18 Musicians. Sus- 


Several to ernes run through 
toe programme of toe 1982 
Cheltenham Festival which, at 
least on paper, looks toe most 
attractive and xmaginately de- 
vised for some years. The 
appearance . (until the last 
minute not ensured without 
diffihanging obstacles) of the 
Warsaw Chamber Opera is one; 
and its performances must have 
a later notice to themselves. 
The Stravinsky centenary is an- 
other, probably toe most domin- 
ant, touching most of the morn- 
ing - chamber concerts and 
establishing a symphonic beach 
head at both toe, opening and 


closing orchestral concerts of 
toe fortnight. 

It is a pity that (except, of 
course, by the ever-inventive 
English Bach Festival) the 
centennial excuse bas not this 
year been more boldly used to 
redress toe genuine cases of 
neglect that still lurk in corners 
of .toe composer’s canon — am I 
toe only person in Britain long- 
ing to hear once again a live 
account of Persephone or 
T hreni? . .If the brief for the 
BBC Northern Symphony, in 
Saturday’s opening concert 
under Irwin Hoffman, included 
neither of ' these its offer of 
the Symphony in C, hardly 


Grainger centenary/Elizabeth Hall 


Dominic Gill 


On the face of it, the Song- 
makers’ Almanac recipe of 
words a n d music — wedding 
literary and historical context 
closely to the work— promised 
to be the most illuminating of 
all possible concert treatments 
of toe complicated, quirky, 
inspired near-genius of the 
Australian composer Percy 
Grainger, who was born in Mel- 
bourne a century ago next 
Thursday. 

For once, in the unusual case 
of Grainger, since the person 
and toe ideas, the life and the 
context, are beyond argument 
so much more interesting than 


the music, a preponderance of 
words and narrations would 
have been ' both welcome and 
justified. What we got oh Friday 
night was a compromise, which 
really only scratched the surface 
of toe .Grainger phenomenon: 
and with it, a great preponder- 
ance of the “dishing up" of 
folksong with Grainger, for all 
his lively unsentimentality, con- 
fused with (In that he con- 
sidered it an adequate repre- 
sentation of) the real and living 
article. 

Some of the folksong settings 
are effective enough: Grainger 
significantly outgrew the refined 


English drawing-room ballad 
style of his friends and contem- 
poraries Roger Qu Liter and Cyril 
Scott, and his best settings — 
such as toe deft and magical 
“Six dukes went afishin” or 
the splendid narrative “ Bold 
William Taylor" — are folk 
transcriptions of real poignancy. 
But 17 Grainger folk arrange- 
ments, not to speak of a half- 
dozen by his contemporaries, 
made for a fairly long haul be- 
fore we arrived at the concert’s 
final section entitled “The 
Essential Grainger? ” — an 
apposite question mark, since 
toe section was devoted to a 


nothing coy — quite the rovers- 
— about tbc description «: 
rampant sexuality and there ar- 
cye-catching cameos from Kevin 
Williams as the disastrous I: 
clumsy attendant Filch (a nice 
complement. this. to his 
haughtily camp waiter in (lira.- 
end Dolls) and Fiona Hendlcy 
as a sly Jenny Driver with a 
tingling soprano. 


more often played, was all toe 
same most gladly accepted. 

It cannot have been merely 
its placing immediately after 
the premiere of an undemand- 
ing bright-coloured and well- 
made Essay (Janacek crossed 
with Stravinsky and flavoured 
with a dash of Tippett) by 
Stephen Dodgson that made the 
Symphony in C seem more .than 
ever one of toe supreme 
Stravinsky masterpieces. 

Acute In .matter of tempo 
choice even if toe cruelly 
exposed character of toe instru- 
mental groupings was not 
always cleanly mastered, the 
reading itself had wit, energy. 


and discipline. 

Stravinsky, flanked by a hand- 
ful of almost unknown Russian 
composers from the early- 
Modemist phase of the revolu- 
tionary period, figured in the 
enterprising song recital that 
Jane Manning and her pianist 
Tony Hymas gave at the Pit- 
ville Pump Room yesterday 
morning. 

After toe alluring but blurred 
outlines of Rozlavetz’s Four 
Compositions — and the bizarre 
mystical experiments of 
Obukhov’s Four Balmont Songs. 
Stravinsky’s Four Russian 
Songs cleared the air like a 
gust of morning breeze. 


fragment only of the machine- 
performed Free Music K 

The evening's sketch was noi 
without its happy moments — 
notably the use of Grainger's 
own recorded voice and his own 
piano playing 

But too many basic questions 
remained unasked, or un- 
answered. Eccentric failure,, nr 
inspired prophet of the avani 
garde? — and especially, what 
extraordinary quality of Grain- 
ger’s was it (patently not his 
musioal'production alone) whic h 
inspired such devotion from 
Busoni. Delius and Grieg, me- 
of far greater musical genius" 



ROYAL COURT THEATRT UPSTAIRS. 
730 2554. Ol POK ENGLAND br 
Trevor Griffith. Evas 7.30. Tue A Ttiirr 
mat 2-30. AIT Mats C2. 


4031. CreOrt cards 01-B30 9232. Grouo 
Mies 01-370 6061. Evenings 8.00. Mat 
Wed 3-00. Sat £.50 & 8J0. ANOTHER 


country &y Julian Miteiwll. 


RAYMOND REVUEBAR. CC 01-734 1593. 
At 7-00. 9,00 and 11.00 Din. Own 
ton, PAUL RAYMOND present* THE 
FESTIVAL OF EROTICA. Spet>al (an. 
eessMi T o members of HM Armed Force*. 
Admission El .00 to iflf 7 Dm oerf. 
25ih sensational veer. 


ROUND HOUSE. 267 2564 TALKING 
Sand of new york in gioconda 
A SI-YA-U and TRISTAN AND ISOLT. 
Prrvs Ton-- B O. 'Alt seats £2i. Opens 
Tsmor 7JJ. Sub Evgi 8.0. 


SADLER IS WELLS THEATRE. EC1. CC 
01-278 8916 (5 lines!- dro sate 579 
6061 . 24 -hr Instantly confirmed res. 

TiPsaMlfU* 7 JO. Ttiur A SMI Mats 2.30 
NORTHERN BALLET THEATRE ... 
Ton-t A Tom or- A Midsummer Nights 

'Wed to Sab La SylpWdes/AttractlonfLa 

ComlrcIFaust Divertimento. 

Royml ballot School 26 tn 31 Joly- 
3rd Dance Subscription . now open ring 
01-278 0855 (24 Hr*1 for brochure. 

AMPLE FREE PARKING alter 6.30pm. 


SAVOY. S 01-836 8888 . CC 930 9U2. 
Err nines 7.45. Mats Wed 2.30. Sjrt. 
5.0. 0.30. MICHAEL FRAYN'S NEW 

COMEDY NOISES OFF. Directed br 
MICHAEL BLAK.EMORE. 


ST. GEORGE? SHAKESPEAREAN TH. 
01-607 1128.- Perft 7.30 em. MACBETH 
Thursday. TWELFTH NIGHT. Ton L 

ST. MARTIN’S. CC 836 1 443. Evni 8. 
Toes mat 2.43. Satindiyj 5 A 8. 
A«1h| Christie's THE MOUSETRAP. 
World's lOdBest-ever .run. 30th Year. 
Fully air -rand I tinned theatre. 

VAUDEVILLE. CC 01-836 MM. ■ Cvesfl. 
Wed mats 2.4S- Sap 5 & &. «jnDOr! 
JACKSON In AGATHA CHRISTIE'S 
CARDS ON THE TABLE. FpMv 9 * 
conditioned Theatre. 

VICTORIA PALACE. CC 01-834 1317-8. 
Q1-626 4735-6. Group sales 379 
6061. DENNIS WATERMAN ANTON 
RODGERS. The News Musical WINDY 
CITY, baaed On the play The Front 
Page. Directed b* Peter Wood. Previews 
Ju v 9 OWNS JULY 20 at 7.00. 
Sob nfstittv at 7.30 pm. .Mat Wed 6 Mt 
3 pm. Credit card Hotline 930 9232. 

WESTMINSTER. CC 834 0283. HANNAH 
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□A NEMAN. JOHN CARSON In THE 

JEWELLER'S SHOP Pone John Paul 
li. Em 7.45.- Mats Wed & Sat 2.30. 

WHITEHALL. CC 930 669217765. 839 
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WYMDHAM'S. Air-rand- S 836 5028- CC 
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Mon-Frl 7 JO. Sat 436 & B.OD Wed 
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Miller play. Last 4 necks. COUN 
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F.T. CROSSWORD 
PUZZLE No. 4,914 

ACROSS 

1 Steer to entice in disdain (S) 

5 Bird disliked by soldiers? 
( 6 ) 

9 Remove an off-print (8) 

10 A continental near relative 
( 6 ) 

U Short musical drama to 
. repeat badily (8) 

12 Lather mixed for an old 
German coin (6) 

, 14 Left because of obstinate 
sweethearts’ quarrel (.6, 4) 

18 Half of former capital 
divided (4, 6) 

22 Finish in attempt to be 
fashionable (6) 

23 Meaning tti enrol a visionary 
(8) 

24 Article is in red and in 

[ relief (6) 

28 Knitted jacket from town in 
Dyfed (8) 

26 Ambassador for example, 
gets delayed outside (6) 

27 Secret taught to a select 
few (S) 

DOWN 

1 Type of oil for a type of 
wheel (6) - 

2 A small drink for each little 
boy (6) 

3 One who brings in the 
money could be nearer (6) 



4 Biscuits for small French 
afternoon snack (5, 5) 

6 Abnormal irritability seen 
before this Frenchman (8) 

7 Deplore article put into 
service (8) 

5 The art of composition from 
bird on boat (8) 

13 Where cocktail shakers and 
prisoners may be seen 
(6, 4) 

15 Late crop possibly coining 
from the hear! IB) 


16 Employing her inside for 
conducting (8) 

17 Beady to do as one is told— 
as a servant may be? (8) 

19 Outlaw bachelor together 
with sex-appeal (6) 

20 An Australian gardener (6) 

21 Debilitated by a medicine? 
i6) 

The solution to last Saturday's 

prize puzzle Mill he published 

with names of dinners uekt 
•Saturday. 























Financial Times Monday July 5 1982. 



HNANCIALT1MES 

fMWXEN HOUSEiCWWONSIRET. LONDON EC4P4BY 

1 “ '^tnarrtimo, London P$4/feJg 

Telephone: m-248 8000 ' 




to run 



' '®® Management 

— in oar 
time for 

I ^compromise • with Aslef, the 

• WtSon. -was over. 

; the ■‘onion’s apparent 

Vnfljp gnesa fr consider ah ex- 
; TJifiment with flexible rostering, 
™ Board was not prepared for 

• more negotiatioiis which, on 
j basis- of ‘ past experience, 
; -would probably have -led 

■ -nowhere: 

, ;< The British Hallways Board is 

■ ■ -determined to assert its right to 
jn a nage -The conditions for doing 

■ -so- c oflld - - hardly be more 
‘ propitious. It has the govern- 
; yeut and public opinion firmly 
j ^behind it. Its plans for flexible 
. 1-rostering have bgen upheld by 
- -Lord McCarthy’s arbitration 


tribunal. There must be some 
doubt, to put it no higher, about 
the stomach of the Aslef rank 
and file for a long strike: 

The “ showdown " approach 
to industrial relations can often 
Wow up in management's face; 
even if it succeeds, it is no 
guarantee of 'lasting improve- 
ment. But there are situations 
-when it is unavoidable. Behind 
the argument over flexible 
rostering is Aslefs record of 
obstructiveness in defence of 
status quo, reinforced by ?ls 
ability to bring the industry to 
a halt. Until Aslef members and 
through them the executive are 
persuaded that behaviour of 
this kind does not pay, there can 
be no secure future for the 
railway. 


L 


i. i. 


Common ground 


.THE ELECTION of Mr Roy 
* .Jenkins as Leader of the Social 
Democratic Party puts the 
; liberal-SDP Alliance back on 
track: that is. about where it 
.might have been expected to be 
had the Falklands crisis not in- 
tervened at the beginning of 
,AprO. Mr Jenkins is now well 
placed to press ahead with the 
development of the Alliance, of 
jbint policies with the Liberals 
: and perhaps even a joint mani- 
! festo. 

I. It is not that we have any 
criticism of his rival in the con- 
■ test,. .Dr David Owen. Apart 
from considerable qualities in 
. his own right. Dr Owen had the 
added attraction of allowing 
voters the possibility of slapping 
a generation and electing a 
reader not unduly conditioned 
by the war and the early post- 
war period. Dr Owen might also 
have led a rather more radical 
party than Mr Jenkins. 

■ Yet in Mr Jenkins’s case time 
is of the essence. So is -the 
formation of the Alliance. It is 
-Are next general election that 
- matters if he and it are to make 
Iheir mark. It is very difficult 
to imagine Mr Jenkins remain- 
ing as Prime Mlnaster-wraiting 
in (say) 1988 or 1989. And if 
the Alliance is not cemented 
55000, it is quite possible that Me 
liberal and the Social Demo- 
crats win go their separate 
ways. Mr Jenkins is a bold 
-man who has staked a great 
-deal: in seeking the realignment 
«f British politics in Ihe first 
place, in standing in unlikely 
iyclections, and in winning the 
leadership. . 

-- It should not he forgotten, 
however, that during the short 
history of the Social Democrats 
touch. has changed. The Labour 
party has gone into what may- 
he terminal decline. The Con- 


servative Party has survived its 
difficult years in office since 
1979 to the point where it is 
now talking with renewed con- 
fidence of securing a second 
term. 

None of that was inevitable. 
The Labour Party allowed itself 
to become bogged down In its 
own internal, organisational 
problems. The Conservatives 
made some initial mistakes, but 
where they have scored is in 
helping fundamentally to 
change the dimate of opinion. 
Only the . Left-wing- of- -the 
Labour Party talks nowadays 
about the -need for much greater 
State intervention, ... further- 
nationalisation and more 

economic controls. 

~ The lecture by Sir Geoffrey 
Howe, the Chancellor of the 
Exchequer, at the weekend was 
the most conspicious example of 
tiie way the Government is 
beginning . to edge towards a 
further liberalisation of .the 
economy. 

One of the attractions of the 
Social Democrats is that they 
seem to share them views. They 
believe more in the forces of 
the market than in state demo- 
cracy and . ..place greater 
^ emphasis on the freedom of the 
individual titan on tile near-' 
compulsion sometimes exercised 
by the trade ' unions. Their 
additional merit might lie-in 
adding an element of 
compassion. 

Nothing in British politics 
can be certain, especially given 
fee nature of the electoral 
system.- But the idea of a 
debate between the Alliance and 
the. . Conservatives over the 
future of this country in the 
next two years is wholly wel- 
come. Between them they have 
come to occupy the common 
ground of a good two thirds of 
the - electorate- 


Shultz’s task 


ACCORDING to President 
Reagan, the departure of Mr 
Alexander Haig from the State 
Department and his replace- 
ment by Mr George Shultz, does 
not presage any shift in Ameri- 
can foreign policy, because that 
policy emanates from the Oval 
Office in the White House. If 
this were to prove strictly true, 
St would be regrettable, since 
there are a number of aspects 
of UJ. foreign policy which are 
urgently in need of reassess- 
ment. Indeed, some people on 
this side of the Atlantic would 
go so far as to say that the 
accumulation of causes of fric- 
tion between the U.S. and 
Europe is beginning to reach 
dangerous proportions. 

In one respect — the tone and 
style of foreign policy formula- 
tion — change is almost inevit- 
able, and may well be a change 
for the better. In contrast with 
Mr Haig’s prickly and conten- 
tious view of his position and its 
prerogatives, Mr Schultz is gen- 
erally characterised as a team 
player. 

J. In itself, the minimisation of 
gratuitous bureaucratic squab- 
bling would be a significant step 
forward. But the more important 
question is whether a- change 
of style will also be accom- 
panied by a change of sub- 
stance. 

The most worrying issue of 
substance is the President’s 
recent decision to extend and 
intensify measures for blocking 
the export of equipment re- 
quired for the planned Soviet 
pipeline designed to carry gas 
to Western Europe. This move 
has caused serious irritation in 
Europe, because the trans- 
atlantic argument over East- 
West trade in general and the 
pipeline in particular seemed 
to have been calmed down at 
the recent Versailles summit, 
and this sudden reversal can 
only cast the gravest doubts on 
whether the U.S. is a reliable 
interlocutor on issues of policy. 

Justification 

More serious than the depri- 
vation of American components 
for gas turbines — with some 

delay, substitutes can no doubt 
be produced in western Europe 
or even in Ihe Soviet Union— is 
the thinking behind the Ameri- 


can embargo. When it was 
knposed last December, it was 
justified as a retaliation for Ihe 
crackdown in Poland. Now it 
is being rationalised by . the 
President on two quite different 
grounds: Europe must be pre- 
vented from becoming too 
dependent on Soviet energy, and 
the deprivation or delay in 
foreign exchange earnings from 
sales of gas to Western Europe 
will seriously damage the 
Soviet economy. 

Undoubtedly, the Soviet 
Union needs large quantities of 
foreign exchange, and undoub- 
tedly its economy is In difficul- 
ties. But there is little reason 
to imagine that a policy of 
economic warfare will bring 
about any of those changes in 
domestic or foreign Soviet 
policy which the Reagan 
administration would like to 
see; 

Mrs Thatcher is not normally 
accused of being soft on Com- 
munism, and Britain does not 
need Soviet gas; but when the 
British government moves 
ahead of its European partners 
to thwart the American 
embargo, it is time for the U.S. 
administration to take notice. 

Disturbing 

Washington's tacit endorse- 
ment of Israel’s actions in 
Lebanon is equally disturbing. 
Not merely can there be no 
military solution to the Pales- 
tinian problem, the U.S. is os- 
tensibly committed to the (lamp 
David peace process which re- 
quires diplomacy and politics to 
take precedence over force. The 
Reagan Administration is wor- 
ried about Europe becoming too 
dependent on Soviet gas. But 
i' is already too dependant on 
Arab oil, the threat of disrup- 
tion in the flow will be enhanced 
if Mr Begin creates a new 
generation of Palestinian terror- 
ists. or if America alienates the 
moderate Arab states. 

Alexander Haig was regarded 
by some as Europe's only true 
friend in the U.S. administra- 
tion. George Shultz’s advantage 
is that he is an economist rather 
than a former general, and per- 
haps he can persuade President 
Reagan of some oTfhe'fa'cts of 
interdependence. 


PALESTINE LIBERATION ORGANISATION 

Defiance in the face of defeat 


By Roger Matthews, Middle East Editor 


T® 

JL am 


SR AEL has in fee past four 
weeks- largely fulfilled its 
bition to crush the prilitary 
arm of the Palestine Liberation 
Organisation. The process w£B 
be complete, it believes, when 
the 6,000 PLO guerrillas trapped 
in west Beirut by the invasion 
of Lebanon are ejected from 
the country or destroyed. 

It is .much less likely to be 
successful in silencing fee 
demand for a Palestinian state 
which has been at fee core of 
Middle East political strife for 
several decades. 

Gen Ariel Sharon, Israel's 
Mi n«tfw of Defence, summed up 
what he considered to be bis 
army's recent achievements 
when interviewed on June 25 
on Israeli television: “We are 
close to achieving a state of 
raim on the Lebanese front, to 
a state of achieving those objec- 
tives we set out to achieve, fee 
main- and chief objective being 
fee destruction of the PLO and 
the destruction of the terrorist 
force in Lebanon.” 

Asked if it was possible to 
annihilate the FLO militarily. 
Gen Sharon replied firmly: “It 
is possible to deal a lethal blow 
to the PM)-” 

Four days later, Mr Menabem. 
Begin, Israel's Prime Minister, 
said during a speech to fee - 
Knesset feat he did not wife to 
h umilia te fee terrorists because 
they were human beings, 
“although they do not deserve 
either pity or respect because 
they are base murderers. There 
is no doubt about it, especially 
feat man who grows hair -on bis 
face [Mr Yasser Arafat, chair- 
man of fee PM)]: he is base, 
he is a murderer of children.” 

However, fee 6,000 men 
corailed in west Beirut comprise 
only about 0.15 per cent of the 
estimated 4m people who would 
claim- to be - Palestinian. 
Together with Mr Arafat and 
other members of the PLO 
leadership they are principally 
responsible for articulating the 
demands of the Palestinian 
people, for organising the 
armed struggle against Israel 
and for representing the move- 
ment in the Arab world and 
internationally. 

Their success can be judged 
by the cost in lives and property 
Israel is willing to inflict in 
order to destroy them. Israel 
believes that fee aims of the 
PLO, as enshrined in the Pales- 
tinian National Covenant 
approved by the first Palestine 
National Congress in 1964, are 
basically incompatible wife the 
survival of fee State of Israel— 
feat this is a terminal Struggle 
between two peoples' over fee 
right to live in one tiny strip of 
Middle Eastern territory. 

The battle for Palatine 
erupted after fee Second World 
War when an exhausted Britain 
lost fee will to find an accept- 
able political solution to its 
mandated territory. In fee next 
three decades fee newly-created 
State of Israel won every battle 
it fought and each victory 
brought a "further dispersal of 
Arabs from Palestine. 

They have spread widely 
throughout the Arab countries 
but remain heavily concen- 
trated on and around fee 
territory which they claim is 


r;-.\ 1ST.; 


& * 



Yassar Arafat, the PLO leader, touring .battle lines south of Beirut 


rightfully theirs. 

Some 600,000 Palestinian 
Arabs live within Israel proper 
and are citizens of the state 
created in 1948. Another 1.2m 
live under Israeli occupation 
in fee West Bank and Gaza, 
which was overrun by Israel in 
fee 1967 war. Over lm reside 
in Jordan. There are probably 
300,000 in Syria. 250,000 in 
. Kuwait and sizeable communi- 
ties in other • Arab nations 
Another 500,000 live in Leb- 
anon, where they . are now 
having their first taste of Israeli 
occupation. 

Nearly LS9m Palestinians 
are registered wife fee United 
Nations Relief and Works 
Agency as refugees, of whom 
about 35 per cent still live in 
61 camps. UNRWA employs 
nearly . 17,000 people, mainly- 
Palestinians, to work with the 
refugees and its budget require- 
ments for 1982 were estimated 
at $265m. 

.It is impossible to assess how 
many members of fee 
Palestinian diaspora wish to 
return to. .their homeland; but 
few, if any, woxdd' oppose fee 
idea of a Palestinian state. Cer- 
tainly ; fee - overwhelming 
majority in the West Bank and 
Gaza want an end to Israel’s 
15-year occupation and - fee 
opportunity to exercise self-' 
determination. 

-It has been . fee articulation 
of those desires, political and 
military, which over fee past 
two decades ha s cau sed such 
controversy and turmoil in the 
region. 

The PLO burst upon fee 
world during fee late 1960s 
and early 1970s. The violence 
of its early international actions 
earned it tire terrorist label 


which still dominates the public 
mind in many western 
countries. 

It -sought » also to influence 
Arab regimes and none more 
than that of Jordan where the 
large guerrilla presence eventu- 
ally became a direct challenge 
to fee authority of King 
Hussein. The threat, of fee 
PLO’s emergence as a state 
within a state provoked him 
into military action and in 1971 
fee PLO guerrillas were finally 
ejected from the kingdom. 
Three years later fee Arab 
summit at Rabat recognised fee 


The delicate balance col- 
lapsed, pushing fee country into 
the disastrous 1975-76 civil war 
from which it has never 
recovered. The intervention of 
fee Syrians-— Initially to check 
fee Palestinians and * their 
Leftist Moslem allies and later 
to restrain the pro-Israeli moves 
of Maronite Christian militias — 
halted fee worst of fee fighting 
but did nothing towards 
re-establishing v: a workable 
political system. 

In the political chaos that 
remained, fee PLO was able to 
establish its own state within 


Militarily, the PLO has already 
been crushed and many of its 
guerrillas killed or captured 


PLO as “the sole legitimate 
representative of tbe_ Pales- 
tinian people.” 

Meanwhile, most guerrillas.; 
had fled to Lebanon vrhere.feere 
was already tension .between 
PLO forces and fee government . 
There had been an attempt to 
regulate the - Palestinian 
presence by fee 1969 Cairo 
agreement which was hammered 
out after talks between fee 
Lebanese. Egyptians and PLO 
leaders. - - 

The Cairo agreement was 
unable to withstand fee strain 
of substantially more PLO guer- 
rillas arriving from Jordan. 
Their presence in turn injected 
another, and perhaps critical, 
wedge into fee split which had 
been appearing between fee 
Moslem and Christian communi- 
ties in Lebanon. - 


sovereign country wife greater 
success than ever before. 

The PLO was able to run its 
own centralised bureaucracy, its * 
own 4 .bpspHalk^’ schools,- police 
force;’ -factorial --ports*- -radio 
stations, newspapers and, of 
course, its 'own-army. The 
Lebanon, like Jordan, was also 
used as a military platform to 
launch attacks across the border 
into Israel. 

• The. military aspect of fee 
PLO struggle ■ had. however, 
"been overtaken in- fee past two 
years by fee successful emphasis ‘ 
which Mr Arafat placed on 
diplomacy. The -pace -at which 
fee PLO was permitted to open 
offices around the world, fee 
growing support- it received at 
fee 'United Nations and the 
willingness of” Western nations 
to advocate" Palestinian self- 


determination on the West Bank 
and Gaza, were testaments to 
Mr Arafat’s achievements. 

But fee relative treedum Mr 
Arafat enjoyed in Lebanon did 
not disguise fee divisions within 
the PLO — which are frequently 
a mirror of those which exist 
between different Arab states — 
and the contradiction implicit 
in Mr Arafat's approach and fee 
goals of the PLO as set out in 
the National Covenant. 

These were highlighted by Mr 
Arafat’s tempered enthusiasm 
for fee eight-point Middle East 
peace plan - proposed last 
summer by the then Crown 
Prince Fabd of Saudi Arabia. 
The proposal implied acceptance 
of a Palestinian state on the 
West Bank and Gaza in return 
for Arab recognition of Israel, 
The Palestine National Coven- 
ant, however, talks about the 
“liberation" of all Palestine and 
only allowing those Jews to re- 
main who were in residence 
before the “Zionist invasion.” 

Israel, not - unnaturally, 
emphasises this aspect. . It 
refuse^ to trpat with an organ- 
isation which is ’ ideologically 
committed to the destruction of 
fee Jewish state. The hardline 
Arab states which fund indi- 
vidual organisations under the 
PLO umbrella appear unwilting 
to accept any significant changes 
to the covenant 

Mr Arafat’s position has been 
more ambiguous. He heads at 
Fatah, which claims to be 80 
per cent of the PLO and in 
Lebanon has exercised some 
degree of independence, while 
balancing between -fee military 
proximity of Syria and fee less 
obvious financial pressures of 
Saudi Arabia and the other oil 
states which provide a large 


part of Ms estimated a 

year budget. 

Lord Carrington, when lm 
was British Foreign Secretary, 
along with European counter- 
parts had been privately urging 
Mr Arafat to recognise Israel a 
right of existence add thus in 
■ effect unilaterally renounce fee 
covenant. The Arab summit last 
November foundered on- 
precisely this implication ami 
. the Saudi peace plan was 
shelved amid sharp Aran 
. divisions. 

Whether Mr Arafat really 
believed in i( or not Is open to 
debate. He and other Palestin- 
ians argue passionately tna* 
recognition of Israel b the only 
card they have to play: to 
.discard it. while Israel continues 
to build more settlements on the 
West Bank and Gaia. and feows 
every indication of wishing to 
atuiev the territory, would be 
diplomatic suicide. There i* 
little doubt that Mr Arafal 
would trade a great deal for a 
■West Bank-Gaza slate. 

Israel’s invasion of Lebanon 
and its declared intentions of 
dealing a lethal blow to the 
PLO have temporarily made 
these arguments academic. Mili- 
tarily. the FLO has already 
been crushed and many of us 
guerrillas killed or captured 
Political]'" it faces agonising 
choices. 'The PLO knows that 
it is not wanted in any Arab 
country and that any reluctant 
host will impose ils own pol- 
itical conditions and severe 
military restrictions. 

Syria would demand adher- 
ence to the " rejections: ” line. 
Egypt would look for 
acceptance of the Ganip David 
approach. King Hiissrin^wiuiUl 
fear a return to pre-19”l and 
non-Arab Iran would insist on 
■fee Islamic nature or the Pales- 
tinian demands. 

Meanwbile the Palestinians 
suspect that the crushing of the 
PLO is part of a larger Israeli 
objective to incorporate the 
West Bank and Gaza within the 

internationally-declared borders 
of Israel. 

Israel has already started to 
promote “village leagues” 1»« 
the West Bank and Gaza in 
opposition to the elected mayors 
who support fee Pl-D. Most 
Palestinians dismiss those few 
who have been . tempted to 
co-opera le with Israel in setting 
up the leagues as “ quislings “ 

But it is no more possible to 
judge precisely fee extent In 
which the PLO does represent 
fee Palestinian people than ii 
was to know whether Mr Robert 
Mugabe’s Zanu PF party; was 
fee one wanted by the majority 
of Zimbabweans before the first 
free elections. 

Isroai appears determined to 
prevent the PLO ever being put 
to fee test. It has also probably 
guaranteed feat the Palestine 
National Covenant will not be 
amended for many years. The 
invasion of Lebanon looks so far 
to have been a triumph for 
those who reject all compromise. 
But there is nothing to suggest 
it will have done anything to 
moderate or quell Palestinian 
demands for what they and 
many others consider to be 
their legitimate rights- 


Men & Matters 


King’s accession 

Fung King Hey is one of feat 
select group of Hong- Kong 
entrepreneurs whose . rags-to- 
riches careers have made them 
local folk heroes. But the chair- 
man of Sun Hung Kai Bank, 
and Sun Hung Kai Securities, 
the colony's biggest stock- 
broking firm which he recently 
allied with MerriU Lynch, has 
always seemed a more elusive 
character ' than his multi- 
millionaire peers like shipowner 
Sir Yue-Kong Pao or property 
tycoon Li Ka-Shing. 

Perhaps it is because Fang’s 
career cannot be traced in 
supertankers or square feet; or 
perhaps because be speaks no 
English. 

Fung decided fee other night, 
however, to detail something of 
his life to an after-dinner 
audience in Hong Kong— and a 
spell-binding evening it was. 

It was in 1939 that fee 17- 
year-old Fung arrived in Hong 
Kong from his native Canton, to 
start work in a shipyard on a 
wage of 13 cents a day. “ This 
was raised by five cents."- he 
recalled, “ after u year of ser- 
vice.” In fee evenings, he 
taught at a night school to make, 
enough money to keep himself 
fed and housed. 

Not particularly enthusiastic 
about fee nuts and bolts of 
maritime engineering, Fung 
returned to Canton in 1941 to 
work at a money-changer’s stalL ; 
It was a job. he found, after his 
own heart Within four year's 
he progressed from apprentice 
to chief dealer to treasurer. 

This was the time in which, 
he said, he ** grasped the nettle 
of business operations ” — and 
got severely stung. For after 
the war. Fung decided to go 
into fee import-export business 
with a cargo of Canton fish, 
bought wife borrowed money 
for resale in Taiwan. 

f£is crew proved unequal to 
fee -rough seas encountered on 
fee journey, and by the time the 
boat reached Taiwan, the fife 


was stinking and Fung was 
broke. “There was only one. 
thing to do. ... I mortgaged fee 
boat and with that money 
bought a cargo of fruit for fee 
journey to Hong Kong.” Came 
another storm, the fruit rotted, 
“and all I got for my entre- 
preneurial efforts was a load of 
debts." ■ 

- Back then to money-changing 
where Fung’s -proven skill 
yielded what he called “very 
satisfactory results.” Now, he 
had fee capital to diversify into 
real estate and trade finance. 
And on fee back of Hong Kong’s 
property market boom in fee 
1960s, Fung accumulated fee 
wealth to found SHK Securities 
in 1969 and. a year later, the 
finance house which has now 
been given a full banking 
-licence. 

Today, each of his companies 
is capitalised on the stock mar- 
kets art around HKS lbn 
(£97. 75m). 

One of fee nice things about 
being as rich as that is, if you 
want a spot of advice, you do 
not have to mess about with 
middle management Wonder- 
ing where to take SHK Securi- 
ties next, Fong paid a call ra 
January on Waiter Wrist on, 
chairman of Citicorp. Wriston 
phoned his opposite number at 
Merrill Lynch, Roger Birfc, and 
fee deal publicly announced in - 
mid-May was’ set in train. 

Fung’s decision to bring in 
Merrill Lynch as a n operational 
partner for SHK Securities— 
just as. four years before, he 
brought in France’s Paribas as 
a partner for SHK Bank — 
reflects a divergence from the 
keep-it-m-fe e-family attitude of 
many large Chinese companies. . 

“A successful company," 
Fung says, “is one which has sec 
itself dear objectives and is 
free from the family style of, 
management" And his next 
objectives? “We are heading 
towards . . . establishing a multi- 
national financial and invest- 
ment sendee supermarket. . . 
With our feet in Hong Kong 


wife our back resting against 
China, with our face towards 
the Pacific; Ocean, we took at 
fee world.”’ •’ ’ ‘ 


Venturous spirit 

After Smirnoff and Vladlvar — a 
vodka with a forthright English 
name, devised by fee boffins at 
James Borrougb, fee Beefeater 
gin people, for sale in fee 
United States. 

In a smart marketing ploy,, 
chairman Norman. Burrough 
aims to cash in on the American 
love of English trad ition— which 
helped his gin go down so well 
across fee - Atlantic — and a 
radical swing in their drinking 
habits. • . : . . _ 

No reason, he says, why 
straightforward English vodka 
should not keep its end up 
against better known Soviet or 
Baltic competitors. 

To this end, Burrough has pro- 
duced an up-market ". tipple 
which, at around ill a bottle, 
costs over three times more than 
the cheapest U.S. vodka. The 
English version is produced 
with extraordinary cart, how- 
ever, being filtered through 
charcoal made from fee best 
Sussex oak to give it, Burrough 
claims, a distinctively mild and 
subtle Savour. 

He confesses reluctantly that 
American grain is a major 
ingredient But distilling is an 
art he adds, and it is the 
technique that counts. 

Burroughs marketing men 
tell him that Americans -are be- 
coming less addicted to drinks 
like Bourbon or rum. They want 
something lighter, a versatile 
mixer which does not linger on 
fee breath. 

With the aid of 3,500 sales- 
men, Burrough expects Britain's 
newest spirit to make a big 
splash. Its well-balanced taste 
and smell will be the key. he 
says — and he should know. He. 
and his co-directors sfe»t each 
day by tasting every batch of 
snirit before it . leaves their 
Kennington distillery, just to 
ensure perfection. 


Welsh cohiiectioiv; 

The City .of London.: has much 
to offer .fee rest of fee country. 
But has- it got what the Govern- 
ment heeds now— — ah, enter- 
prising Welshman' .wife some 
time on his hands! ” 

' Management '■ : headhunters, 
usually so secretive: in, their 
searches, are now openly scour- 
ing fee Square .Mile, as well as 
fee rest of Britain, for a; Celt 
of board-room calibre to , lake 
fee chair of the Welsh Develop- 
ment Agency. 

Finding a replacement for fee 
late Stephen Gray is proving so 
. difficult a task feat some com- 
promises are even bring - made 
over the Welsh connection. The 
candidate's links wife fee Prin- 
cipality may .be satisfied if he 
has' a Welsh grandparent or has 
merely worked there for some 
years. 

Nigel Dyckboff,'Of manage- 
ment consultants Spencer Stuart, 
tell me that ideally the WDA, 
which disbursed about £82m to 
Welsh industry in 1980-81, needs 
someone with top business ex- 
perience. aged from early 50s to 
around 60. and wife a couple of 
davs a week to spare. . 

For those two. days’ at fee 
Agency's headquarters near Car- 
diff. the salary would be £16.318 
a year — a remuneration now a 
year overdue for revision. . 

Welsh’ Secretary. Nicholas 
Edwards would apparently Tike 
to appoint fee new man for two 
terms, a period of six years in 
all. In recent years mostrbf fee 
Agency’s efforts have • been, 
.directed towards- factory build- 
in® but ihe plan now is to switch 
the emnhasis’ towards’ more 
di-reet investment in Welsh in- 
dustry. 


Game licence 

Middle-aged American , in Soho- 
night-clnh: “I ■l^t^Htyrna.-.b-'ick 
at the hotel tonfcfet — * no point. 
Jn bringing a game -warden on a 
hunting trip." 


Observer 


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af _ Financial Times Monday July 5 1982 



SURVEY 


Monday July 5 1982 




Japan remains stuck with lower 
economic growth for some time. 
An improvement will depend on 
a Western economic pick-up 
but the West is. concerned 
at Japan’s trade dominance. 


Trade partners 
apply pressure 

BY CHARLES SMITH, TOKYO CORRESPONDENT. 


Four aspects of Japan: a Bullet train , tiered 
expressway, planting rice and building cars 


OFFICIALS AND headline 
writers in Japan seem to have 
grown out of the habit of . using 
the word “xhokku” to describe 
any untoward happening in the 
outside world since the time of 
the first (1978) ofl. crisis — 
perhaps because of the feeling 
that no other event could inflict 
the sensations of panic and 
helplessness that were' experi- 
enced at the time. Even so, the 
first six months of 1982 seem 
likely to be remembered as one 
of the more. unpleasant periods 
in the nation’s post-jrar history. 
“ From the beginning of the 
year Japan has been, under 
intermittent, . and at times 
threatening, pressure from its 
trade partners in the West to 
limit the sizes , of its trade 
imbalances with them and to 
remove what Western nations 
are apparently unanimous in 
seeing as unfair and reasonable 
barriers to manufactured goods 
imports. - L V ' 

The trade issue had not been 
formally settled at the start of 
June when . Mr' Suzuki, the 
Prime Minister, left Tokyo for 
Versailles for talks with other 
advanced countries’ heads of 
state. But the, problem did at 
least appear to nave reached a 
stage where -some progress 
could be said to .have been 
made, By the middle of the 
year it - seemed dear that 
Japan’s celebrated current 
account -surplus would grow 
only slowly in 1982, from, the 
previous year's levels, and 
.that trade imbalances with 
individual nations would tend 
to narrow very slightly- rather 
than widen. 


Whether or not a performance 
that largely reenacts what hap- 
pened last year will satisfy the. 
countries -that have been 
urgently demanding a change in 
Japanese trading practices is 
one of the unanswered questions 
facing the Japanese government 
as it prepares for the second half 
of the year. The omens can be 
described as neither particularly 
ominous nor especially good — 
given that both the UJS. and tile 
EEC have unfinished business to 
transact with Japan (in the form 
of negotiations with the. U.S. 
over farm imports in October 
and continued bearing at Galt 
cm. the EEC’s ■ charges against 
Japan). 

What does seem clear, how- 
ever, is that the virtually static 
behaviour of : the country's 
external trade In 1982 will be 
very bad news indeed for 
Japan's domestic economy. The 
country’s economic growth 
during the two years from the 
immediate aftermath of the 1979 
oil crisis to autumn 1981 
depended overwhelmingly on 
the faith that the external sec- 
tor was= moving rapidly from 
deficit to -.surplus (while 
domestic demand remained fiat 
under the impact of the govern- 
ment’s deflationary measures). 

The disappearance of any 
growth to speak of in the 
external sector means that Japan 
will now have to grow under its 
own steam — and by all accounts 
tins could be difficult 

The Impact of the slackening 
of Japan’s export drive on the 
growth of the economy as a 
whole showed up first in the 
last quarter of 1981 — when the 


GNP recorded a 0.7 per cent 
fall in growth — for the first 
time in seven years. It became 
more broadly apparent in May 
of this year when the release 
of figures for the GNP during 
fiscal 1981 showed a real growth 
of only 2.7 per cent— fully 2 per 
cent less than the Government 
had forecast in its original 
projections for the year. 

However, disappointing low 
growth figures do not represent 
the sum of what has bappaned 
to the economy. Slack domestic 
expansion also means that the 
government’s estimates of fiscal 
revenue have come badly 
unstuck and that what was 
always exp&ted to be an 
exceedingly difficult year for 
Japan in terms of making both 
ends of the "budget meet will 
now be more tricky than ever. 

Because ot the sudden slack- 
ening of its economic growth 
rate and the accompanying 
headaches about bow to balance 
the budget, Japan would appear 
to be faced with a series of 
economic decisions this autumn 
that will be among the most 
difficult for at least a decade. 
Tbe government badly needs to 
generate more domestic growth 
so as to increase its tax revenue 
— and to fend off the dangers 
of sharply-increased unemploy- 
ment that could materialise if 
Japan continues with less than 
a 3 per cent growth rate for 
more than a year or so. * 

To make the economy grow 
more, however, the Finance 
Ministry will need to launch a 
pump priming programme of 
public works expenditure for 
which the funds may well not 
be forthcoming. 

Japan has one more theo- 
retical option for dealing with 
its current economic predica- 
ment — the lowering of interest 
rates. But for reasons which 
are closely -related to the 
country's quarrel with its 
external trade partners, the 
option is one that cannot pos- 
sibly be exercised. Japan’s 
interest rates are already far 
lower than those of most 


Western countries (including 
the U.S.) with tbe result that ■ 
money has been flowing out of 
the country in rapidly increas- 
ing amounts during the past 
few months. 

The capital outflow has con- 
tributed directly • to the 
extreme weakness of tiie yen — 
which in turn has made 
Western nations even more 
apprehensive than they might 
otherwise have been' about 
Japan's posture in international 
trade.* 

The two events that could 
deliver Japan from its domestic 
difficulties — and from the ex- 
ternal problem that is closely 
related to them — would be a 
"spontaneous’’ recovery in its 
own demand, or the recovers’ 
of the economies of some of its 
Western trade partners. 

Risk 

Neither event appears totally 
out of the question as viewed 
from Tokyo. Some mild signs of 
recovery in domestic demand 
have made an appearance in 
Japan’s recent economic 
statistics, although there is a 
clear risk that the recovery 
could be aborted by the depress- 
ing influence of slower exports. 


In the Western world, 
Japanese analysts claim to 
detect some signs that things 
will get better in late 1982 or 
early next year. But the im- 
provement appears unlikely to 
come soon enough or to be 
strong enough to enable Japan 
to resume anything remotely re- 
sembling the export-oriented 
growth after 1979. 

If Japan remains stuck with 
lower economic growth for the 
rest of 1982 — and perhaps for 
much of 1983 as well — ques- 
tions may well have to be asked 
about the impact on a formerly 
fast-growing nation of rates of 
growth that will be not much 
different from levels known in 
Europe and America. 

The first answer to such 
questions could well be that 
the Japanese will deserve it. 
Critics of Japan's recent 
economic performance — includ- 
ing some in Japan itself — have 
made the point more and more 
often' in the last few months 
that a single advanced indus- 
trial nation cannot, and should 
not. expect to be able to grow 
at a much faster pace than the 
nations which are its main 
trading partners. 

A second view of Japan's 
predicament could take the line 


that the experiences of the past 
few months should have taught 

Japan a salutary lesson — to the 
effect that no nation can hope 
to continue taking more out of 
the world economy than it puts 
into iL This, apparently is the 
lesson that the Japanese 
government itself is most 
anxious to draw. 

A White Paper on trade pub- 
lished last month by the 
Ministry of International Trade 
and Industry (MITI — the 
Japanese department that has 
overall responsibility for trade 
policj* as well as for the affairs 
of most of Japan's major indus- 
tries* emphasises strongly the 
need for a bigger input by 
Japan into the world economy — 
and into the well-being of 
Japan's trade partners in the 
West. 

A greater contribution by 
Japan to the development of 
original technology, more job- 
creating investments in the 
Western nations, and an en- 
hanced foreign aid programme 
were included on the MITI 
agenda. Non-MITI observers of 
Japan's evolving international 
role might include the need for 
Japan to shoulder a larger 
share of the burden of its own 
defence. 


Economy 

n 

Trade 

n 

Balance of payments 

• m 

Foreign relations 

m 

Regional relations 

IV 

Relations with Europe 

V 

Overseas Investment 

VI 

Export prices 

VI 

Defence 

vn 

Resources 

vm 

Trading companies 

vm 


ENTS • 

i 

Foreign label exports 

IX 

Export restraint 

IX 

The Yen X 

Distribution 

X 

Service sector 

XI 

Agriculture 

XI 

Business case studies XII, 

xra. xiv 

Business guide 

XV 

Industrial standards 

XVI 

Foreign manufacture in Japan 

XVI 



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Financial Times- Monday July 5 1982 

JAPAN II 


Economy held back by 


slack 



in 


West 


T HIS HAS not been agood year decline inr exports during the 
so far for Japan's planners. ■ find three months of last year 
Barely a quarter of the way into ’ 
die new fiscal year (which 
began on April. 11 the Govern- 
ment has long since abandoned 
any pretence of believing that 
its original forecast of 5-2 per 


resulted in Negative growth for 
the GNP as A whole (the first 
time in seven years! and al- 
though both exports — and the 
economy performed slightly 
better in the - firct quarter of 


cent for the real growth of the . 1382 overall levels of- economic 

activity: remained well below 
expectations. " 

; . Particularly worrying and 
disappointing has been the 
steady decline of industrial pro- 
duction . since -last October 
(except irL March when the 
downward trend -was . tempor- 
arily reversed).^ After a 1.6 per 

■dent. • provisional month to 
month decline in industrial out- 
put index in : May, the industrial 
production index is now only 
LA per cent- up on the levels of 
a year ago. . .. „ 

. ‘ One .consequence of the 
economy's failure to pick up 
during- the first half of 1982 has 
been that the- export-oriented 
"processing industries” (cars, 
consumer' electronics, etc) 
appear to have Joined the rest 
of the economy in giving a gen- 
erally lacklustre performance. 
Throughout much of 1981 the 
processing sector was perform- 
ing strohgly in- contrast with 


GNP can be achieved^ 

Instead, economists are talk- 
ing cautiously of growth of 
about 3 per cent, or not much 
more than the rate achieved in 
1981. A look at the horizon sug- 
gests that economic management 
for the rest of the year will be a 
decidedly tricky business. 

The factors that have • hin- 
dered accurate forecasting of 
the economy and effective 
economic management have 
included the illogical • fas .the 
Japanese see it) behaviour - of 
UJS. interest rates. A continu- 
ing wide gap between interest 
rates in Japan and the U.S. has 
meant, -for one thing, that capi- 
tal has flowed out of the country 
in Teconi amounts. This in turn 
has produced a drastic impact 
on the yen which is now at its 
lowest level against the dollar 
for more than two years. 

One of the most serious 


real wees index 


1201 



*in www TjMg 


results of .the yen’s weakness." the’, general, atmosphere of 
and of the gaping difference gloom in the materials sector of 
between U.S. - and - the 


interest rates has been an 
almost complete inflexibility in 
the Government's interest rate 
policy. The inability of the 
Bank of Japan to lower nominal 
rates of interest has meant that 
real interest rates (ie, the gap 
between nominal rates and the 
rate of inflation) have risen to 
unusually high levels. This has 
meant hardship for the cash- 
hungry small companies which 
remain heavily dependent on 


non-ferrous metals, oil refining, 
paper and pulp and petrochemi- 
cals industries and other pro- 
ducers of semi-finished indus- 
trial materials. 

Id the first half of 1982 some 
materials industries - appeared 
to be performing very slightly 
better than in the previous half 
year (in part because a tem- 
porary revival in the yea 
exchange rate reduced their 
import biMs). The processing 


bank loans and are now find--, industries, however, more than 

made up for this marginal turn 
for th'e better by a loss of 
dynamism which was the direct 


ing them more and more costly. 

Calculations 


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The failure of economic re- 
covery in the West to material- 
ise when it was expected, has 
dealt another blow to Japan’s 
calculations for its" domestic 
economy. Slack demand in the 
U.S. and in Western Europe has 
been directly reflected in the 
poor performance of Japanese 
exports — which had provided 
the mainstay of economic 
growth for two consecutive 


result ' of slower overseas 
demand for Japanese exports. 

One of the economy's black- 
est spots is the public sector. 
Quite aside from the factors 
which so far have been beyond 
the control of foe government, it 
is now obvious that economic 
planners gave in^ against their 
better judgment, to- political 
pressures to set unrealistically 
high growth, rates on which to 
plan this .year's budget. One gov- 


years until the autumn of/ admits that 
A sharp quarter Jo quartes: .foc ^Econoxnic Planning Agency 

- --'"•V 'fay* • 

- .» r J.-., _\tl . r**.' -if-* . 


staff originally advocated a 
GNP target of about 3 per cent 
(now the range considered 
attainable). -By the time the fore- 
cast became policy it had crept 
upwards by two percentage 
points. 

Briefly, foe result has been 
to turn an already precarious 
budget situation into a full- 
blown fiscal crisis. Slower than 
expected growth last year has 
led to a shortfall in tax revenues 
of around Yfi.OOObn. 

This will probably be even 
larger this year, bar a sharp up- 
turn in foe economy. 

Pledge 

The government pledge to 
hold down deficit spending has 
already been made unrealistic 
(eventually the shortfalls wOl 
have to be covered by issuing 
large amounts of new national 
bonds, on top of an already 
hefty debt load this year of 
Y12.000bn). Stimulating the 
economy, through a supplemen- 
tary budget with a large incre- 
ment of public works spending, 
may be delayed at best, at worst 
made impossible. 

There is in fact a sharp split 
in opinion as to whether the 
government should make any 
attempt to stimulate the econ- 
omy. So far Prime Minister 
Suzuki has stuck to his guns 
on the need to continue with 
plans to reform government fin- 
ances. that is, cut down on defi- 
cit spending. In this, his govern- 
ment has the support of the 
leadership of Keldanren. the 
powerful organisation which 
represents big business in 
Japan. Big business is in the 
vanguard of a move to keep a 


big government from growing 

* lU Qn e tihe other hand, the main 
advocate in the government for 
stimulating the economy is the 
Director General of the EPA, Mr 
Toshio Komoto. Mr Komoto is 
also eyeing foe Prime Mints- 
Jert iost in party elections 
scheduled for this autumn. 
There is a possibility that the 
argument between the Keyne- 
sians and the fiscal conservative* 
In the Cabinet may simply fall 
by the wayside if Prime Minis- 
ter Suzuki becomes too bogged 
down in the non -economic poli- 
tical squabbles within the ruling 
Liberal Democratic Party to 
venture any timely actum on the 
economy before the November 
election. - L 

. There are a number of other 
schools of thought on how the 
government should best proceed 
with the management . of the 
economy. But the 5 main argu- 
ments are now tending toward 
debates over whether Japan 
need strive for rates of econ- 
omic growth in excess of its 
major trading partners. 

However, there is still a 
widely held assumption that the 
economy must expand at at least 
a moderately fast pace (say 4 
per cent to 6 per cent a year) 
in order that future problems 
with unemployment, now run- 
ning at about 2.3 per cent, can 
be avoided. This school would 
therefore say that something 
has to be done as quickly as 
possible to gel the economy back 
into a growth. 

In any case, given the poor 
state of government finance^ 
and a continuing resistance on 
foe part of consumers to con- 
sume, this year the domestic 
economy will probably not be 
covering at anything like the 
rate most people would prefer. 

This leaves the external sec- 
tor. which over the past two 
years has carrie d the lionN 
share of economic growth— to 
the chagrin of Japan’s trading 
partners. 

In X9S0. 3.3 per cent of a real 
GNP rate of 3.7 per cent was 
external demand (that is ex- 
ports minus the value of im- 
ports). Last year. 1.8 per cent 
of foe sluggish 2.7 per cent 
growth, or exactly two-thirds, 
came as a result of trade. This- 
was nearly the exact reverse of 
what the government had en- 
visaged. . 

Charles Smith 




help to defuse 
tensions over international trade 


JAPAN IS .likely to remain at 
the -centre of tensions within 
foe international trading 
system for fob" foreseeable 
future. Although foe : striking 
export growth of 1979-1981 has 
petered out; foe capacity of the 
internal economy to ■ absorfs 
more imports' is strictly limited. 

The readt is .foat compiants 
by foe U-S. and SEC about 
aggressive exporting . ‘may 
diminish but any -hopes .they 
have of redressing immediately. 
tbeir trade imbalances with- 
Japan through higher exports 
of their own wiH be 'dis- 
appointed 

Officials at the- Ministry of 
International Trade and Indus- 
try in Tokyo feel that tensions 
with foe XLS. have passed their 
peak. Certainly foe - Reagan 
Administration's -stand against 
congressional pressure for legis- 
lation, which would relate 
Japanese access to the U-S. 
market "to -the openness of 
Japan’s market to U.S. products, 
has scaled down foe dispute 
between the two governments. 

At foe same time, the willing- 
ness of Japan to., accelerate 
tariff reductions and make .uni- 
lateral tariff cuts, coupled -with 
measures to scale down non- 
tariff harriers, has itself helped 
to defuse foe. situation. But 
important talks on. agricultural 
trade will beheld in the autumn 
and it is unlikely that UJ5. 
pressure .on . Japan w3t ease 
until Japan has enlarged quotas 
on such items as beef and citrus 
products. 

For Japan, harmonious rela- 
tions with foe U.S. . are essen- 
tial: the US., market takes a 
quarter of Japanese exports. 
This was reflected in comments 
by Mr Shintaro Abe, Minister 
"for International Trade and 
Industry, after foe June pack 1 
age of tariff cuts. 

The steps taken then on 
manufactured goods were final; 
be said, but he was pleased with 
Washington’s reaction, although 
the EEC did not seem to be 
aide to grasp foe significance 
of what Japan had done. “I'm 
more interested in reactions 
from foe U.S. anyway, since it" 
supports free trade, than in 
what the EEC thinks,” he com- 
mented. 

His officials expect discord 
with foe EEC to continue at. its 
present high level- But Japan 
cannot brush the EEC countries 
aside — they are the destination 
for 15 per cent of its exports. 

The EEC has taken Japan 
into the. disputes procedure of 
foe General Agreement' ’on 
Tariffs and Trade, not on a 
specific action, but on the whole 
range of its trading policies, 
arguing .generally that -foe-. 


J JAPANESE EXPORT DESTINATIONS 

Country 

Passenger 

cars 

Commercial 

vehicles 

Total • 
vehicles 

Share 

..<«> 

TJA .I;-, 

1,761,403 

543411 

2404,814 

38J 

West Germany 

235,248 

39,462 

274*705 

« 

Australia 

" 134,701 

132,745 • 

.267,446 

4.4 

.Saudi Arabia". 

- 105,273 

146481 

251454 

42 

Cawed? 

199,951 

46.518 

246,469 

4.1 

Indonesia ■ -• * 

26,120 

162,540 

188460 - 

3a 

UK ' " : 

14A583 

32,910 

181,493 

3.0 

Nigeria 

50,653 

100,653 

151406 

2.5 

South Africa- 

. 4,487 

115456 

119,743 

2D 

Netherlands 

103,334 

12,519 

115453 

ID 

Other countries 

1*176,789 

769410 

1*946,104 ' 

322 

Total 

3£46£42 

2403,905 

6,048,447 

100.0 

Notes: (1) Excludes KD sets. (2) Other countries includes exports 
to the United Nations and other international organisations. 
Source: JAMA. 


.structure of foe Japanese 
economy has meant that it has 
not had the benefit: of tariff 
reductions it should expect 

This' action, unprecedented 
in its scope, ■will keep foe 
points of tension, in foe fore- 
front of political-- consideration 
in Brussels and Tokyo, but it 
blunts . the possibility of 

measures' leading to further 
restraints of trade. The danger 
has always been — and not 
only in the EEC — that gov- 
ernments harassed by domestic 
industries hurt by Japanese 
competitiveness would lower 
the import shutters and in turn 
prompt, retaliation from Tokyo. 

Range 

The problem' for foe Japanese 
Government has been foe 
success of its own. industry in 
exploiting specific markets with 
what.is thought in foe. Wes^ to 
be a relatively narrow range of 
products. There _ has ' been 
nothing Illegal in. this, in terms 
of international trading rules, 
but there has been the nagging 
feeling in -foe West that Japan 
has not played a full role in foe 
international system ; because. 
Its market has appeared to- be 
dosed. Not in a. formal sense, 
but because of its separateness 
and, its preference for domestic- 
ally-produced goods. 

Thus while Japan’s exports 
have- increased markedly since 
I960 and especially since 1973, 
its manufactured imports ex- 
pressed as a percentage of GNP 
have' .remained static. In i960 
foe percentage' was Z.4 and in 
1980 it was" 2.5. The comparable 
figures for foe -US. -are 2.0 and 


4.3 and for the-EEC 3.3 and 6.0. 

The Japanese Government, 
however, acknowledging that as 
Japan is currently in the best 
shape of all the industrialised 
economies and foat Japan now 
accounts for 10 per cent of 
world GNP. is in foe middle of 
a process designed to emphasise 
partnership" in foe trading 
system. 

There are two main elements: 
the first « the opening of the 
Japanese market which involves 
not only action on tariffs and 
non-tariff barriers, but also the 
establishment of special offices 
and services to- help potential 
sellers on foe market The 
second is industrial co-opera- 
tion, involving the encourage- 
ment of greater direct invest: 
meat, the establishment of more 
joint ventures with foreign com- 
panies and technology links with 
-groups overseas. 

But foe effect of aH "these 
actions will be gradual. Export 
restraint, however, is not so 
much a policy as a practice 
widely seen as essential "by 
afflicted European and U.S. car, 
electronics and machine tool 
manufacturers- among others. 
In fact, sluggish overseas mar- 
kets are -the main factor cue 
rently holding back Japanese 
exports. 

During 1 1979-81 there was a 
30 per cent increase in 
Japanese exports at a time 
when the demand for finished 
goods, according to economists 
. Marubeni, the trading house, 
rose in Japan’s overseas 
markets by 3 per cent. But in 
the process or increasing 
njarket shares, heavy stocks 
were built up and they now 
overhang the markets. 


At the s3me time, higher 
corporate investment overseas 
- has meant some move away 
from direct exporting to manu- 
facture overseas, while exports 
have been intentionally held 
back, either because Japanese 
companies were engaging . in 
voluntary restraint agreements 
or were adopting what is called 
prudent marketing. 

These background ' factors 
have been at work while signs 
of reduced foreign demand 
have multiplied: 

• Export: contracts won by 
industrial machinery exporters 
in. April were 83 per cent lower 
than in March and 24.5 pear cent 
.down on April 1981; 

• Cutbacks in international oil 
exploration have led foe four 
major Japanese steel producers 
to. .cut . production of seamless 
pipe by up to 40 per cent for 
foe Juiy-September period. 

At .foe Economic Planning 
" Agency" in Tokyo it is noted 
foat Japan's basic material 
industries are losing some of 
their international competitive- 
ness. but that in the high added 
value sector, the knowledge 
intensive industries, like 
robotics, sales boomed untH 
September 1981. helped by pre- 
vious heavy investment and foe 
yen’s, low value. 

Revenae 

The slowdown in export* 
.started soon after that and the 
general expectation am one 
F* specialists and economist? 
m Tokyo is foat this year total 
revenue from expons will he 
.broadly the same as In 1981. 
with perhaps a 2 per cent down- 
turn. 

This will take some pressure 
off foe overseas markets and 
ease the strain on Japon'* 
competitors, bui these same 
.competitors will not necesxanlv 
find sales In Japan any easier 
to achieve. The domestic 
economy is in the doldrums and 
Japan's trading partners do nut 
a*«n in foe immediate future 
lik<ay to gain any benefits from 
an increase in foe international 
value of the yen. 

But even if such economic 
factore were to swing in favour 
of ragtier Japanese imports, it 
is by no means clear that 
potential _ suppliers to the 
market will be any readier than 
in foe past io come to terms 
wfo the intricacies «>f japanV 
distribution system ynd make 
the sort of Investment which is 
necessary to >ecure a place in 

this most quaUiy-consciotu of 
markets. 

Paul CUccseright 







Financial Times Monday July 5 1982 


hi.. : .. 


JAPAN in 


Seeking the right perspective of a 





OF ALL the major industrial 
powers Japan has the most un- 
usual balance oF payments 
situation. Because of her past 
competitiveness in exports and 
protectiveness in imports, 
Japan has built up a pattern of 
surplus on her visible trade ac- 
cuunl. and although this is 
no longer as automatic as it 
used to be. Japan in the normal 
event is still better placed than 
the countries of North America 
and Europe. 

When taxed on this visible 
surplus, so unnatural in terms 
of her own weak raw materials 
and strong thirst for imports of 
foods tuff?, energy and raw 
materials. Japan falls back on 
the argument that it is needed 
to finance her investments of 
capital abroad, including both 
aid to the developing countries 
and investment in all the con- 
tinents. 

Another feature of Japan's 
visible trade balance is that she 
traditionally earns a surplus 
from the other industrialised 
countries, especially America 
and the European Community, 
and uses this surplus partly to 
pay for her very large imports 
from the oil-producing countries 
and other Third World states 
producing vital raw materials. 

Currently. Japan's export 
momentum is failing, with a 
steady downswing in export 
growth for the past 12 months. 

But then the sluggishness in thp 


Japanese domestic market 
(means that the gap may actually 
■remain the same, and some 
.foreign ohservers in Tokyo 
believe that the trade surplus 
is hardly affected by these 
mutually offsetting trends. 

It is true that some senior 
Japanese officials, even in the 
Ministry of International Trade 
and Industry, wax emotional 
about rhe pressure from 
Western nwrkets for Japan to 
cut down on its trade surplus. 
Mr Wakasugi of MITI in par- 
ticular has declared that if the 
Japanese surplus with the in- 
du stria Used countries could not 
he mainfained to pay for Middle 
Eastern and Southeast Asian oil. 
then “ rhe Japanese economy 
would be reduced and. to sur- 
vive. we would have to increase 
our transactions with Com- 
munist countries.” 

But it is not common for 
Government officials to indulge 
publicly in such speculation. For 
the most part they prefer to 
express the legitimate wander 
whether the present and im- 
mediate future trends are going 
to sustain this Japanese surplus 
at all. 

The trade account has not only 
to cover the substantial predict- 
able deficits with Opec members 
and others, but also the invisible 
deficit as well. The current 
account surplus including 
these two was able to 
reach a level of $5.9bn in the 


Wider view of 
foreign policy 


U.S.-JAPAN TIES remain the 
cornerstone in Japan's relations 
with the rest of the world. Mr 
Mike Mansfield, the U.S. 
Ambassador to Japan, likes to 
describe the relationship as 
“the single most important bi- 
lateral relationship in the world 
— bar none! n Japan shares a 
mostly common view of the 
world with the U.S.. having 
prospered under a more or less 
(these days less) free system 
of bilateral trade. 

Japan shares the political 
values of the U.&. and, to a 
somewhat milder extent, the 
current U.S. preoccupation with 
Hie Russian threat The 
bedrock of the relationship is 
a mutual defence pact, which 
dates back three decades. 

Since the first oil crisis, how- 
ever, there has been a dramatic 
shift in how Japan perceives its 
worldwide interests, and how 5t 
goes, about conducting foreign 
policy to suit those interests. 
The U.S. may still be the single 
most important concern, but 
events and realities, have, in' 
the words of one senior 
"Western diplomat, forced Japan 
to "discover the world." 

President Nixon's declared 
“multi-polar” approach to diplo- 
macy, culminating in a surprise 
reopening of U.S. ties with 
China — Japan's giant neighbour 
— without consulting Tokyo, 
brought home to Japan the 
awareness that it could no 
longer depend on Washington 
to consider Japan’s best 
interests in pursuing its own. 

That Japan's diplomatic cup- 
board was all but bare of alter- 
natives to the U.S. connection 
became all too obvious when 
the 1373 oil crisis struck. 
Japan's post-war world began to 
crumble. 

The immediate result oF the 
oil crisis was that Japan 
“discovered” the Middle East. 
a region in which it had pre- 
viously shown no interest 
despite the fact th 2 t most of its 
oil came from Arab stales via 
the world's major oil companies. 
Japan's efforts since have been 
concentrated on currying 
favour with the moderate Arab 
oil producers. 

The kinds of splits between 
Japanese and U.S. foreign 
pokey which have arisen in 
recent years can be seen quite 
clearly in Middle East policy. 
Japan shows very little sym- 
pathy for Israel, and has 
e:\prcv-nd «uiie a lot of support 
for the Palestinians' cause. 

Staying in line 

!t n iho true, however, that 
Japan's Middle East policies 
no', been far enough out 
nf -in-,- v.-it.-i those of the U.S. 
:*> cui:?': serious problems. One 
.-!gn of Japan':- prac:nar;<rn :s 


Ilia 

Eayt. 

'. i- currently 

ihc hig 

gv- 

re-; 

picr.i 

ijpane-f 

official c? 

•elopmeni aid out.rdr 

C, . 

uu. 



S 


ntlj. Japan 

nev 


•cpliun of Us n 

did no 


i]v _ 

ct burred 

in 

Mr 1 

d to E 

-ands. 

\ vi'.r ir. 

r-2 

•non 

occurred ii 

v.hu-r 

poll 


.Ci iicear ?0 

rca 

an 

i,- 

t-rm hosts, ho 

J jp,«n 



•no?- vita! 

n;.iurj 

r»>-f 

•iri-c-. 

co:i!a assure 


of 

■: ‘OP 

13 o: cr.ery. 

and rav 

T.-l 


.:apan now pay 

bt-r; 

cue a 

u.-ntion lo 

!! pary. 


During a recent visit by the 
Chinese Premier to commemo- 
rate the tenth anniversary of 
restoring ties, there were 
virtually no outstanding bi- 
lateral problems to discuss. 

Japan manages rather 
adroitly to maintain a balance 
between its policy towards 
China and towards the Soviet 
Union, despite the absence of a 
formal end to the 1939-45 World 
War. a treaty stalled by a dis- 
pute over four islands held by 
the Russians north of Hokkaido. 

In Latin America. Japan is 
making its mark — from Mexico, 
from which Japan wants oil. 
to Brazil, where it is involved 
in huge mineral development 
projects. Japan is even offer- 
ing to help build a new Panama 
CanaL 

Co-operation 

Ties with Africa may not 
show dramatic movements, but 
the steady stream qf African 
leaders through Tokyo in recent 
years indicates that Japan may 
have a greater role to play. 

.Asia and the Parfic Basin 
remain the chief long-term 
interests for Japan, however. 
Japan in recent years has 
emphasised the importance of 
co-operation with South East 
Asia, and in fact has fairly dose 
ties with the Association of 
South East Asian Nations 
(ASEAN i, in the form of politi- 
cal and economic support. 

Where are these independent 
initiatives leading Japan? It 
is probably far-fetched to think 
that Japan wants, or could sup- 
port. a truly “independent” 
foreign policy such as those 
adopted by the UK West 
Germany or France. This has 
been ruled aut. first, by a strong 
poRica! determination not to 
pursue, for the time being, an 
active military role. The U.S.. 
for all !».s pressure for more de- 
fence spending, ny Japan, sees 
Japan's role limited ;o being 
able to defend itself belter. 

Second, it also clear that 
changes in Japanese diplomatic 
thinking are not the result of 
hold new leadership on rhe 
national po::r:cal scene. The 
cu-ren*. generation of politicians 
in control of the ruling Liberal 
Democratic Parr. - Government 
are for the mori part cautious 
products r, ? ihc 1950? and 
when foreign policy was a muok 
simpler intellectual exercise 
than it •? today. 

Such ideas as do emerge tend 
to come f-rni a vigorous middle 
lewi « , f burci-uerjis :r the 
Foreign 7.7:r.!st"y and cl - -" where 
wh) fe-.tl have a fairly clear 
and rra;rm??ic i’w r f v.’:a» i- 
in -'v.aa's bcu long-term 
in' :t 

Jap-n's die!;-, 
a - ' ire!!;; 


In print 
m.-':c cfT 
rc-ti'i r. : i - '■ 

giicrr.n:: 


*o tno-i 
ir.ii: 1 .' !Y 


v zrnuni;. 
rejpor. 
rye! op of 
the ViV«: 

ji"r 


I? 




V.‘; 


:r 


of the world. 

Thcurh There have been some 
dir.lon-iiie blunder-., along the 
v;n; . by and ierg-.* Japan'* 
icitiatr.e- have met with suc- 
cess over ;r.e past, few year*. 
After recovering from the 
Nixon ihock. Japan quickly 
formed own links with 
China, seven eg official ties with 
Taiwan. 

The commitment to China in- 
cluded a long-term promise tn 
co-operate in economic develop- 
ment which, despite ups and 
downs, seems to be proving 
advantageous for both sides. 


•"« w: ; iv 
h :.-»■•■* r :o-r:j II. 

:n r-r-r -1 ' -- ••i-rf n*- jeri 
■ ;*v. . . o'. crly-prc-Tcviei trade 
rrretires. 

s'rcadv r!"ir. hr*--o--cr. 

ir n tip;- niinr.'-** of 
. 1 - in v hi .Tip.->n‘c -!cr- 
i if ,-\:n he - 5 ’r.Tf rf-T 
;h :‘h *hc«i» r r 
in "h* f«r 

•: n f- !y rr - ‘ , o >, '“ in :V- 
f’s? if V.V- rn Ei'rnni; 

Jh* T'.S.. T !”ini-.- *J- r 

: s •.■Jill c^rrid? red m r -r? 
i.rvir‘3?' 

One extreme example has 
br'n -U pene-e rear? inn tn the 
war botv.ccr Eritsin anti Argen- 
tina over the FoiV.lmds Island?. 
Japan angered Britain 
w- 1 h ! t .5 rath'T flimsy -attc'ion? 
against Argentina, and then a 
vote, r.c-ir the ^nd of the con- 
flict. in favour r.f a UN f^curity 
Council cal? for a c*J3£0Stc. 


W!T r r 

Th; 


va- vetoed by 
Japan's relations 


c UK 


CONTINUED ON PAGE IV 


fiscal year ended in March. But 
the overall balance of payments 
was in deficit to the much larger 
sum of S7.9bn largely because 
of the high rate of capital out- 
flow. 

This in turn was a conse- 
quence of the inviting differen- 
tials in interest rates (Japan's 
being about half those in the 
U.S. for much of the time). 
Outward investment reached 
SS.Sbn during that year, about 
two and a half times the level 
of the previous year. 

Within that current account 
surplus of ?5.9bn. there was a 
visible trade surplus of SS^bn, 
in spite of which the overall 
deficit was as large as it was. 
This represents the third larg- 
est trade surplus ever enjoyed 
by Japan, contrasting particu- 
larly wtth the So.Sbn deficit of 
the previous year. The surplus 
was more than S14bn with the 
U.S.. and more than SlObn with 
the EEC. 

The consecutive falls in the 
export figures in the early 
months of this year may well 
see a trade surplus for the cur- 
rent year of a rather smaller 
order. Marubeni has predicted 
that the high level of invest- 
ments in manufacturing in over- 
seas markets in the last year 
is bound to reduce exports from 
Japan to those markets, it sug- 
gests by up to S4bn. 

The services or invisible 
account must surely now con- 
stitute one of the most under- 
publicised and under-discussed 



aspects Df Japan's balance of 
payments. It is obvious, given 
Japan's fundamental economic 
situation and recent history. 
That she runs a sizeable deficit 
on the invisible or services 
account, and tbis deficit has 
grown consistently, sometimes 
by leaps and bounds, to reach 
in the calendar year 1031 the 
astonishing level of S13.7bn — 
enough to offset two-thirds or 
the trade surplus tn that year 
to bring the current account 
surplus down to the rather 
small level of under So bn. 

The biggest item in this in- 


visible account is fees and 
royalties, for which Japan paid 
out a net $5.8bn last year. 
Tourists paid out a net S4_lbn 
and the transport account in- 
cluding shipping, freight and 
aviation, another $3.2bp net. 
Japan needs services of this kind 
from outside suppliers and in 
foreign countries to a far greater 
extent than foreigners need 
them in Japan. 

The Japanese understandably 
are baffled by the Western atti- 
tude to invisibles, which in one 
view are a natural complement 
to the trade payments in making 


up a ‘ final current account 
balance. But there' is another 
view, strongly held in Europe 
at this time, that the Invisibles 
are quite separate from trade 
and should not be allowed to ex- 
cuse the running of such a sub- 
stantial visible trade surplus: 

Mr Fujiwara Ichiro, the new 
Vice-Minister at MITI, -has an 
amusing comment, in the days 
long ago when Japan used to- 
endure a very large visible trade 
deficit, Japanese officials had to 
argue with their American, 
counterparts to find sdine way 
of reducing the gap..- At that 
time the Americans took the 
view that the invisible account 
should be considered along 
with the visible as part of. the 
overall balance. In the. same 
way the Americans argued with 
their Japanese ally that they 
should not Just consider bi- 
lateral balances. The whole 
thing could suitably be discussed 
in the framework of multilateral 
trade relationships. 

These days -the Eurocrats m 
the Berlaymom often complain 
in the way that Japan did in 
earlier days, shutting their ears 
to the arguments which the 
Americans used to pot!. How- 
ever, consistency is not a feature 
of international economic dip- 
lomacy over such a long period. 

The forward-looking view is 
typified by Mr Amaya Nachiro 
of MITI, who notes that the in- 
visible trade account shows a 
balance in favour of both the 
EEC as such and of the UK 


When the balance of payments 
is considered between the .UK 
amt .Japan, he feels, the' in- 
visible account should also, be 
considered. 

. The impression given, by the 
Eurocrats and their British and 
. French supporters in London 
and Paris is of-, manfully back- 
ing the outdated horse and 
underplaying, a -part of the 
economy which the Japanese for 
one consider to be the portent 
of the future..' 

This particular argument is 
heightened by the discrepancy 
In- figures, the Bank of England 
and the ' Bank" of Japan giving 
vastly different calculations for 
their respective balances on the 
invisible trade. Since the Bank 
of Japan figures are much more 
comprehensive, detailed, regular 
and frequent, they inevitably 
attract more plausibility than 
the British, ones. 

Question 

But there are problems of 
definition, particularly relating 
to the element of onward trans- 
mission of income to third 
countries, which have not yet 
been ironed out . through multi- 
lateral agreement' in the OECD 
or the Gatt Perhaps it is 
about time that these bodies 
addressed themselves to this 
question, since it is bound 1 o 
come up again as a bone of 
contention on the balance of 
payments problems relating to 
Japan. 

European argue for example. 


that some of the investment 
income from Japan which is ' 
remitted to a bank in London, 
is immediately remitted . 
onwards to a bank in Nigeria, , 
and this should not qualify as . 
income to the UK since tire ; 
bank in Britain will get only .a-/ 
small commission. Whereupon •. 
the Japanese will quote tire 
argument in another context. 
What about visible trade, they 
will ask? 

Recently, a Bank of England 
team had some sessions with 
the Bank of Japan in Tokyo at* 
which- some of these esoteric; 
problems of definition and .■ 
calculation were thrashed out 
No one goes so far as to claim/ 
any specific results, but there is 
a detectable feeling that the 
issue is no -longer quite as 
heated as it used to be. . 

It corses back to the basic 
point of Japanese uniqueness. 
The Japanese economy, poised ' 
between the industrialised West r ; 
and the developing South, is . 
extremely unlike that of the; 
European or North American' 
states. The balance of payments., 
follows necessarily from this-. 
The fact that Japan wttfi its: 
huge industrial economy and 
'hi g hl y literate and numerate" 
population runs a deficit- oa - 
services of the kind that most 
European states, not to mention . 
the U&, would find horrific, is ' 
another part of that difference.; 

Dick Wilson 




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JAPAN IV 


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JAPAN’S FIRST priority, in 
South-East Asia in recent years 
has been to carve out a political 
role for itself in the partial 
vacuum left by the UJS. in the 
post Vietnam war era. This it 
has accomplished with a surpris- 
ing degree of success. 

For the first time, however, 
its trading relations with the 
rest of Asia are coming under 
close scrutiny after years of 
benign neglect. Japan has far 
fewer serious trade disputes in 
the region than it has with the 
West but. many of the com- 
plaints now being beard nave 
for the Japanese an all too fami- 
liar ring. 

There are probably two main 
reasons why regional trade is 
becoming an issue, for Japan. 
■ The immediate concern stems 
J from the economic difficulties 
| faced by the emerging Asian 
j NICs (Newly Industrialising 
Countries) as a result of reces- 
sion and growing protectionism 
in their most important mar- 
kets in the West, 
j A number of NICs. notably 
i Taiwan and South Korea, de- 
- pend heavily on trade surpluses 
with the West to offset large 
“structural’* deficits with Japan, 
which provides machinery, 
parts and raw material vital 
for local export industries. The 
strongest protests about these 
. deficits have come from Taiwan. 

I whose trade deficit with Japan 
1 over the past two years climbed 
to well over S3bn while its over- 
all payments situation turned 
precarious. • 

In February the Taiwan gov- 
ernment stunned Japan by ban- 
ning indefinitely the import of 
1.500 Japanese-made consumer 
items. A number of big ticket 
exports such as large trucks, 
buses and diesel engines were 
also suspended for one year — 
but for special reasons. 

The second reason why 
economic relations with NICs 
have come to the fore, and the 
one with important longer terra 
implications for Japan, is that 
a number of Asian states, not- 
ably members of the Association 
of South East Asian Nations 
(Asean) have at last woken up 
to the advantages of a common 
front in trade. 

Trade relations between Japan 
and the rest of Asia are still less 
complex than those with the 
industrialised ■ West. Asm re? 
mains overwhelmingly a supplier 
of basic raw materials, energy 
and law grade manufactured 
goods, while Japan is primarily 
a crucial source for its neigh- 
bours of machinery, chemicals 
and other materials, investment 
and technology. These relations, 
however, are gradually evolving 
as the rest of Asia catches .up 
with Japan. 

The signs of restlessness over 
trade have emerged mostly in 
the past year or so. and are at 
least partially related to the 
"success” winch' the West has 
had in forcing ■ the Japanese 


Foreign 

policy 

CONTINUED FROM 
PREVIOUS PAGE 


the 'UB. are also subject to 
strain has been illustrated again 
recently by a decision in Wash- 
ington to step up its sanctions 
against the Soviet Union over 
'the Polish crisis. ; 

Japan, it should' be recalled, 
was among the staunchest 
backers of anti-Soviet sanctions 
after the invasion of Afghanis- 
tan. (Europe’s less unified reac- 
tion is m fact it source of 
serious pique hi Japan, because 
Europe gained business as a 
result of Japan’s tough stance.) 

In this latest tightening of 
the anti-Soyiet screw, however, 
Japan's seven-yeaa>old gas and 
oil exploration venture offshore 
from the Siberian island of Sak- 
halin has been threatened with 
disruption by a U.S- refusal to 
supply high- technology explora- 
tion equipment (a U.S. com- 
pany, Gulf OiL is also a partner 
in the venture), prompting a 
diplomatic row. Japan considers 
this unreasonable for various 
reasons, and is strongly urging 
the U.S. to. reverse the decision. 

Japanese foreign policies cer- 
tainly suffer from a number of 
defects. Japan, for instance, has 
yet adequately to sort out its 
relations ■ w ith the European 
Community. (EEC) as a whole. 

Japan's ■ late discovery of 
foreign policy only in the 1970s. 
may explain why. there is less 
appreciation ‘for European 
unity, a concept of the two pre- 
vious decades ' when Japan’s 
main concern was selling tran- 
sistor radios and such. 

One final point to be con- 
sidered is that Japan's own per- 
ception of itself is undergoing 
a 1 rather subtle delicate change. 
White there is ..constant fret- 
ting -that Japan may be about 
to veer tn one extreme or 
.another — isolationist, militarist. 
Communist, and so on — the 
reality seems to be a shift to 
even more moderate political 
climes. This middle of the road 
mentality, ought to help shape 
Japan's thinking toward the 
rest of the world throughout the 
1980s. providing the outside 
world applies no extreme pres- 
sures for Tokyo to change direc- 
tion. 

Richard Hanson 


TRADE WITH S-E. ASIA 

(% of total trade — 1981) 

Export* Imports 


SX Asia 

. 22* 

223 

South Korea 

3.7 

2.4 

Taman 

3jS 

15 

Hone Kong 

35 . 

05 

Singapore 

2.9 

1.4 

Indonesia 

X7 

' 93 


Saurear Summary at Trattm at Japan 


Government to open its markets 
to foreign products. Asean has 
been quick to request that 
Japan provide easier access for 
its goods and apply its preferen- 
tial tariff ■ schemes more 
liberally. 

Japan has reacted coolly to 
the idea of formulating any 
sort of special trade ** packages ” 
for its neighbours. Officials 
have, however, emphasised to 
Japan's Asian trading partners 
that steps being taken to open 
its markets apply equally to all. 

In some minor cases Japan 
has brought forward tariff 
cuts on items of specific interest 
to Asean countries (though the 
Philippines complain that levies 
on banana canons have not 
been changed). One of Japan's 
problems in acceding to requests 
from Asean is that many items 
are in the extremely sensitive 
area of agricultural, trade, 
which is by far the most pro- 
tected and politically important 
sector of the Japanese economy. 

Pressures 

Japan's response to pressures 
from the more advanced NICs, 
notably South Korea and Tai- 
wan. to ease heavy imbalances 
in two-way trade have con- 
sisted mostly of private level 
•‘buy” missions. 

Japan's trade relations are 
naturally complicated bv the 
huge differences which exist in 
the region. 

There is the further problem 
of matching political considera- 
tions in the trade equation. 
China and Taiwan view trade 
through •' politically coloured 
lenses For historical reasons, 
relations with South Korea 
(and North .Korea) require 
nimble footwork (especially in 
view of a South Korea demand 
tabled last year for a whop- 
ping $6bn in aid from Japan). 
Members of Asean keep alive 
memories of experiences with 
Japan's “co-prosperity sphere” 
during World War U (For all 
practical purposes Japan's trade 
ties with Communist Indochina 
have ground to a halt.) Hong 
Kong is a case on its own. 

The trade figures mirror 
fairly precisely these complexi- 
ties. Overall Asia accounts for 
about 10 to 12 per cent of 


Japan's two-way trade with the 
outside world, a proportion 
which is much lower than tne 
ratio of Japan’s direct invest- 
ment in the region over the past 
decade or so i roughly 
cent! and the amount of official 
development aid which the 
Japanese Government picnics 
in the region (around 3P P er 
cent in a recent year). Japan 
enjoys a modest trade surplus 
with the region as a whole nut 
the balances, or imbalances 
differ radically. 

Japan's trade with China, 
which shoves a tenfold increase 
in the past 10 years xo about 
SlObn. is on the other hand 
roughly in balance. Japan has 
large bilateral - surpluses, 
because of its role ns a prime 
source of vital equipment and 
mntcrihls. with South Korea. 
Taiwan. Singapore and Thai- 
land. Hong Konn. without much 
compl ;lint * bas the distinction of 
proriding Japan with its second 
lareest bilateral trade surplus 
(S4.7bn in 19S!) after rhe U.S. 

On the otheT hand Japan’s 
dependence on Indonesia for 
oil imports (IS per cent of the 
total) left it with a 19S1 riefieil 
of over S9bn. Malaysia barely 
manneed a surplus l**t year, 
but this was mainly because of 
a sharp drop in commodity 

prices. 

The net result is that Japan 
runs a large deficit with Asean 
as a bloc (SS.Sbn last year 
against S8.7bn in 19801. A closer 
look ai the content of trade re- 
veals rhat nearly 80 per cent of 
Asean exports to Japan fall mtn 
the category’ of energy supplies 
or timber. The other side of 
the equation is that 80 per cent 
of Japan's exports to 'Asean con- 
sist of machinery (5S per cent) 
and metals (21 per cent). 

These traditional patterns of 
trade between Japan and the 
rest of Asia seemed to work 
more or less to the satisfaction 
of all parties as long as : 

1 — the NIC were able to count 
on comparatively rapid rates of 
exported growth, 

2— that, in the case of com- 
modity producers, the prices of 
commodities remained stable or 
on the nse. Now Japan is ex- 
periencing what happens when 
things begin to come unwound. 

As far as the NICs (that is. 
those which depend on imports 
of Japanese, machinery, etc., to 
run their own export industries) 
are concerned. Japan's biggest 
worry is that others may follow 
the example of Taiwan hi uni- 
laterally banning certain Japan- 
ese imports. Taiwan's situation 
is somewhat unusual in that it. 
is not a party to the General 
Agreement on Tariffs and Trade 
(Gatt) which discourages such 
arbitrary moves. (China and 
Thailand are also outside the 
Gatt). But the frustrations 
which led Taiwan to retaliate 
are just below the surface in 
other countries, and could get 
worse if recession in the West 


were to be prolonged. 

Japan has in the past perhap 
paid too lirtle attention to tnrsi 
Wnds of bilateral trade pro- 
teins bat there are signs ihf 
more people are starting t 
place a higher priority on c 0 . 
tuning the which eou^ 

be caused One important «gr. 
is that the rutin.. Liberal Deni; 
crane Party (LDP) Is prepar «• 
to send a mission to Taiwan led 
by the elobc-t rot ling Mr Mosuc; 
Esaki, the former MITl Mtaiste 
who earlier in the year head***’ 
Ij>p trade missions to the li b. 
and Europe on behalf o? Prim.- 
Minister Suzuki ’»■ Govern men r 

Such a high levil (though u-- 
official) gesture could h;- 
emragh to soothe the feeling 
of the Government tn Taipei 
which at the best of times occa- 
sionally needs stroking to easr 
the pain of having lost offleia 
recognition by Japan. One hope 
is that Taiwan v»l! actually *n-: 
it* largely symbolic import ban 
The Tact’ that Taiwan's trail/' 
deficit with Japan has so fs' 
shown signs of shrinking xnr 
also encourage a return t- 
normality. 

Economic gaps 

Japan's relations in th- 
region have in general dr 
vc loped rather smoothly, con- 
sidering I he economic gap^ 
which exist and the unplea.vm* 
memories nf Japan's earlier br 
haviour With the gUinn? ex- 
ception or South Korea, .Tap*'*, 
appears to be capable of re- 
sponding to the, shtti in a seen**.. 

In South Korea’s case, iiwe- 
of rrade and official aid are a’ 
most impossible to divorce fror- 
the emotion-charged history 
their relationship. Hearting a 
compromise on the mitstandin". 
South Korean demand for Sfihr 
in developmental aid from 
Japan (Japan has so far offered 
a basket of S-Hm. with official 
yen loans amounting to $l.3bn. 
which South Korea rejected) 
may prove harder than ever if 
recent scandals destabilise the 
current government in Seoul. 

Aid to Asean. though delayed 
mostly by Indecision within tie* 
grouping itself is proceeding i 
two regional projects (involv- 
ing about Slbn in Japanese aidi 
Japan, under Us "Asean do*- 
trine. 1 * has pledged furtiier co- 
operation in developing enure: 
projects, manpower, small and 
medium-sized enterprise, and 
low-grade manufacturing and in 
enhancing cultural ties. 

Japan's long-term siratesi ■ 
goal is to maintain stability H 
the region. It needs this bo?^ 
to assure continued access 
Asia's vast natural remum ’ 
and vital sea lanes, throe 
which most of its trade with Uk 
rest of the world must pass T 
Is now dear that trade relatior 
between Japan and Asia wi-' 
play a more important role in 
achieving stability. 

. Richard Hanson 




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• I. . Financial Times, Monday July 5 1982 • • 






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EEC- JAPAN: THE FABRIC OF CO-OPERATION 


with the UK 


INDUSTRIAL cooperation, is 
tfo* ▼ogue.- It is toe^interna- 
ttonal keyword of .the I98 Qb” 
aqrordinf to the Ministry of 
International Tirade and Jh- 
dptry in Tokyo. Current^ it 
•• parroj ves Japan- extending 
api ve co-operatnm .to ectHoomie- 
' troubled industrial democra- 


Hence it has been seized p$>oa 
sl means of reducing die 
te frictions which exist with 
ie EEC. The political rationale 
that recession is increasing 
pressures, which 
tinst Japan’s .interests. 
m, howovee, is in bettor 
tondc sh^je than many of 
industrialised trading part- 
es and tiiereforeit would be 
eaponsible to adfcnowieclgfe 
span's economic power and ex- 
end a helping hand. 

TDo That extent Japanese 
eaders ana seeking to bring 
ystem into .nonnal corporate 
xifeanges of mutual benefit, 
hit an EEC effidal commented 
ynicaBy: "Japanese companies 
lon’t see much point In co- 
peration unless it is to buy off 
►ossible restraints. 1 * " ; * • 

.Inroads 

There is a strong element of 
rath in this because many of 
be joint Japao-EEG ventures or 
iirect Japanese investment is 
be EEC. are is. prec i sely those 
lines, where Japanese exports 
uive made inroads toto the mar- 
:ts of European producers. 
They are areas where, var yin g 
from country to' country,, there 
restraint agreements nr ic- 
ons on Japanese exports 
machine tools, consumer 



Broadly, there are four dtffer- 
types of industrial coopera- 
j: . - . ' 

Japanese production, in the 
SEC because of direct Invest* 
i eat; so far most Japanese in* 
x istment has gone to the TJK, 
\ here . there are 25 different 
. tpanese p3an£L 
I Technical agreements, and 
j mt research and development; 
<f the type which has led Honda 
: [otor to licence BI> to mate in 
ie UK the car known as the 
1 ‘riranph Acclaim. 

’ i Japanese • “arijjtiiud_eqofp- 
: lent manufacture " (OEM) ex* 


pons-wbere a Japanese company 
makes in . Japan goods which 
-bear the band name of the im- 
porter; - Victor has such an 
arrangement with. Thorn EMtin 
the consumer electronics area. 

• Joint projects in third 
countries; meeting for instance 
proeess plant' contracts; Maru- 
beni .and Mitsubishi of Japan 
are co-operating with Koppels 
of Belgium to build a fertiliser 
plant in the Philippines, for 
example. Japan has joint export 
insurance agreements wifi 'the 
UK, France and Belgium to 
facilitate this sort of joint 
venture. ' 

Generally, co-operation which 
fells ' into these categories' is 
"Welcomed ha E u rope an goveob- 
'ineut and industry circles..- Bt£t 
there are reservations, spring- 
ing largely from the perception 
that Japanese' companies ~w3l 
use agreements not for Joint 
benefit but to enhance their 
own competitive position. 

This . is reflected -in a state- 
ment last October from TJNICE, 
the European employers’ federa- 
tion- This stressed the need fat 
“ balanced co-operation ” to 
develop .Japanese technologyin 
the EEC and vice versa. 

“Preference should be given 
to ■ initiatives involving the 
transfer of technology, especi- 
ally by allowing European enter- 
prises to have patents or 
Japaneselieences. 

“ Moreover, joint ventures 
between European and Japanese 
companies in third countries 
Should be encouraged, with 
partners. on. each side confident 
that they ml get a fair share 
of oppo rtunities, to participate 
in markets where the other is 
strong,” UNICE said. . . 

Certainly the joint venture 
idea for third countries has 
been barely developed; Bat on 
the licensing question, Japanese 
executives . would ' probably 
respond that Japan, is stall buy- 
ing more licences than- it sells 
althoug h the 1960s technological 
gap between Japan an one hand 
and the UJS., West Germany, 
France and the UK on the other 
has largely been dosed. ■ 

That mere fact is not suffi- 
cient to allay European con- 
cern.. Generally, the licences 
Japan has tended to buy have 


Capital investment, etc. 
United - Electronics 

Kingdom Direct tovestment— Matsushita, 

Toshiba, Hitachi, Mitsubishi, 
Sony, Sanyo. 

OEM contract— Victor and Tboxn- 

KMT ; 

■ - Joint venture — Victor, Thom EMI 

and Teiefnsken (FRG). 
Automobiles - 

. Technology tie-up— Honda Motor 
and. BL. 

ICs 

Direct investment— NEC. 

Plate glass • 

Technology tie-up — Asain Glass; 
Nippon Sheet Glass, Central : 
Glass and PiUdngton. 

Computers 

- Technology licensing agreement 

—Fujitsu and ICU 

Robots 

Sales . and technology tie-up— 
Fujitsu Fasuc and the 600 
■ Group. ' . • 


Joint It and D 
XJB — Jet engine for 
civil aircraft-- Rolls 
Royc e ' and IHI, 

KHT, MHT, 

Urban gas manufac- 
: turing technology- — 
Asaka - Gas and 
British Gas. 


Co-operation in third 
ma r k ets 

Joint insurance agreement west 
(June XSSI). Germany 

Information exchanges be- 
tween Engineering Enter- 
prises Federation (EEF) 

•" and Japan Machinery 
■ Exporters’ Association 
(JMEA) through regular 
conferences (so far held 
twice — March and Novem- 
ber 1981). 

Hydroelectric power gener- 
ating plant for Ghana — 

•Toshiba and Boving. 

Fertiliser plant for New 
T ea-lan d — TEC and Capital 
Plant International. 

Sea-bed oil development 
project in Abu Dhabi — 
Engineering services. 

Nippon Steel Corpn. and 
WaBie. 


France . Machine tools 

Joint venture— Toy oda Marine 
Works and HES. 

Electronics 

- OEM contract— Ja$ an Victor «rwt 
Thomson Brandt. 

Aluminum . 

Technology tie-up — J&tsui Airs 
ijanaum Industry and A famin - 
kjm Pestne. 

Lysine . 

Ajinomoto and Lafarge Groups 

Fainting Ink 

Joint venture — -Dainippaa ink 
and Kipolm. ■ 

Toys 

Joint venture — Brandai and CGJ. 

' Video cassette tapes 

Local production' — Sony. 

Mop eds 

Technology tie-up — Honda Motor 
and Cycles Peugeot 

• Technology and sales tie-up— 
Yamaha Motor and Motobecane. 

. Carbon fibre 

Feasibility study finished, joint 
production planned — Tonty and 

. ELf-Aquitaime. 


Expart level exchange 
agreed to by Japan 
and . France — 
Science and . Tech- 
nology Co-operation 
Agreement 


Joint insurance agreement 
(January 1981). 

Regular information ex- 
change — GEEF ‘ (French 

. Plant Industry Group) 

and JMEA (so far held 

twice: May 1980 and Belgium 
March 1981). 

Port an d harbour for Egypt 
— Mitsui and Co. and SGE. 

Oil refinery for. Saudi 
Arabia — Chiyoda Che- 
mical ■ Engineering and 
Construction and Tech- 

nip. 

Thermal power generation 
plant . for Nigeria — 

Marubeni Corpn. ami 
Bonygues. 


Capital investment, ete. 
Automobiles 

Tie-up Nissan and Volkswagen. 
Computers 

OEM contract — Fujitsu and 
Siemens. 

Machine tools 

Shares acquisition— Halting Mill- 
ing Machine and Head ear eich 
and Harbeck. 

Electronics 

Direct investment— Sony. 

OEM contr a ct— Victor and Trie- 

funken. 

Joint venture (video equipment) 
—Victor, Telefunken and Thom 

VMT 

Medical equipment 
Joint venture— Olympus Optical 
and Winter and Ibe. 

ICs 

Local production — Hitachi 
Watches 

Local production— Seiko group. 

Tyres 

Business tie-up — Toyo Rubber and 
Continental. 

NC equipment 

Sales and Technology tie-up — 
Fujitsu Frame and Siemens. 


Joint S and D 

Expert level exchange 
agreed upon by 
Japan and West 
Germany — Science 
and Technology Co- 
operation Agree- 
ment 

Helicopters joist de- 
• velopment — KH1 
and MBB. 


Cooperation In third 
markets 

Discussion between German 
Machin ery Industry Asso- 
ciation (VDMA) and 

JMEA (October 19S1). 

Dam construction project ■ 
in Iraq— Toshiba and.: 
BBC. 

Condenser project for Indo- 
nesia — Mitusi and Co. and ' ■ 
Worthioton. : - 

Cold strip mill project for 
East Germany — Mitsui 
and Co. and Dilinger. 


Electronics 

Direct investment — Pioneer 
. Electric. 

Plate glass 

Joint venture— Nippon Glass and 
Belgian Government 
Direct investment— Asabi Glass. 


Joint insurance agreement 
(June 1981). 

Regular conferences be- 
tween the Metal Machin- 
ery Industry Federation 
(FABRTMETAL) and 
JMEA (so far held three 
times: September 1979, 
March 1980 and February' 

1981). 

Fertiliser plant for the 
Philippines — Marubeni 
Corpn., HHX and Coppee- 
RnsL 


Italy Automobiles 

’ Joint venture — -Nissan and Aifa. 
Romeo. 


Joint development of 
YX (civil transport 
aircraft) by Japan, 
tiie U.S. and Italy 
is in progress. 


Regular - conferences be- 
tween Lombardia Machin- 
ery Industry Association 
(ASSOLOMRARDA) and 
JMEA (October 1981)'. 

OH- refinery for Algeria — 

. Marubeni procured equip- 
ment from To besides. 


Netherlands Plate glass 

Direct investment — Asahi Glass. 
Lenses 

Direct investment — Hoya Corpn. 
Audio-visual equipment 
Mutual technology assistance con- 
tract (VTR, DAD)— Sony and 
Philips. 


Snare: Ministxy df International Trade and Indus tey, June 1982, 


Regular conferences be- 
tween the Machinery 
Industry Association of 
the Netherlands (FME) 
and JMEA (so far held 
twice: October 1980 and 
February 1981). 

Colour TV picture-tube - 
plant for East Germany , 
—Toshiba and Holec- 
Furnaces- « i 

Condenser project for Indo- 1 
nesia — Mitsui and Co. and 
Thomassen. 

Joint insurance agreement 
(September 1981). 


been rooted ta basic research, 
while tite. Japanese research, and 
development effort hitherto has 
stressed the application, of 
technology. 

It is this which has helped 
give Japanese industry such a 
cutting competitive edge in cer- 
tain sectors. It is also the 
reason why Brfrirfi officials, for 
exampl e, have been seeking 
ways of marrying British 
research strength with Japanese 
development strength over the 
longer term and why they are 
also anxious to see Japanese 
companies establishing research 


and’ development facilities in 
the UK 

In European Industry the 
introduction of new technology 
is seen as one of the criteria to 
be used in assessing whether 
Japanese inward investment is 
desirable. The Confederation of 
British Industry is seeking to 
promote an EEC policy which 
would bracket this criterion 
with need f or a net increase in 
jobs, the high use of local con- 
tent and the creation of sub- 
stantial exports. 

Whether Japanese industry 
would find such conditions 


acceptable fs another question. 
The repeated delays in the 
decision by Nissan on whether to 
establish a ear plant in the UK 
would suggest, at minimum, 
serious reservations at least so 
far as local content rules are 
concerned. 1 

There is the , danger that 
potential investment might be 
frightened away at just the time 
there. is a sharp upward swing 
in the trend qf Japanese foreign 
investment. 

The latest figures from the 
Finance Ministry in Tokyo show 
that in the. yeiu- to. last . March 


direct overseas investment was 
at a record $8£bn, or 
more than the previous highest 
figure in the year to March 
1980. 

But investment in Western 
Europe was clearly not the 
highest priority. Although it 
increased over the previous year 
by 38 per cent to 3798m, it was 
at a low level compared with 
the heavy stakes. of $2.4hn in 
Indonesia and $2.3bn in the UB. 
Within the European total, the 
level of investment in Belgium, 
Luxembourg and the Nether- 
lands rose, bat it declined in the. 


UK and France. 

This Investment flow has been 
taking place against the back- 
ground of intensified contacts at 
official level. MOT officials noted 
that industrial co-operation first 
appeared in EEGJapan rela- 
tions in 1979, while EEC officials 
observed that interest has 
quickened since mdd-1981 when 
Japan began to take seriously 
the pressures for protectionism 
appearing in the EEC 

Although, at EEC level, con- 
tacts are hindered by the lack 
of an EEC industrial po licy, 
talks have started between HFTX 


and several European Govern- 
ments to provide the political 
framework to facilitate cor- 
porate derisions. 

Talks with the UK have been 
the most fruitful so far, MITI 
said. The UK has presented 
specific pr opos als at two meet- 
ings and MITI believes “lots of 
progress has been made.” On 
the British side, bowever, there 
seems to be a feeling that talks 
would be more fruitful if Japan 
went further than mere reac- 
tion to proposals. 

Paul Cfaeeseright 


i f 



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Financial Times Monday July 5 19S2 


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e to invest overseas 


ALTHOUGH Japanese business 
rcirrenlly enjoys an mug* of 


moving relentlessly round the 


globe to acquire or launch new 
industrial enterprises. Japan 
still accounts for only 7 per 
cent of foreign investment by 
leading industrial nations on a 
cumulative basis. 

Thai is tiie figure included in 
the latest Ministry of interna- 
tional Trade and Industry sur- 
vey and although it may 
already be slightly out of dale 

Jr. par. ;s still certainly behind 
the U.S.'s 42 per cent and 
Britain's 9 jjer tent. Japan 
ranks with West Germany and 
Switzerland in the next bracket 
uf investors after tliev-e two tra- 
ditional leaders, with vumlative 
totals of between S25bn and 
gSOon. 

In Japan’s case the latest 
figure is given as S27bn. or the 
equivalent of S230 per capita. 
Put like that, it does not seem 
much to ger excited about. 

Even if one looks at the com- 
parison between Japanese and 
other Western direct overseas 
investments on a current basis, 
the superficial iir.aze of a 
brash, advancing Japan is still 
hard to sustain. In the latest 
figures riven by MTTI. culled 
from a variety of official 
Western sources, the absolute 
figure of Japanese investment 
in the latest current year is 
smaller than either America's 
or Brinin'?, and only margin- 
al!;.- hisher than West 
GenTiany's. 

Furthermore, as a percentage 
of H\P this investment figure 
U only 0.4 ner cent in Japan's 
case, considerably behind Ger- 
man*.-. less than half of the U.S. 
and hardly more than a ouarter 
of the British proportion. 

Nor is this advance raatntpined 
rigorously every year. In fiscal 
19SQ there was a 6 per cent 
fall in direct overseas invest- 
ment. This was due to a par- 
ticularly sharp drop in Latin 
America, although investment 
increased in the Western coun- 
tries themselves and in some 
.Asian countries. There were 
earlier years when investment 
fell, notably in 1974 — as one 
would expect in the wake of the 
oil crisis — and again in 1977. 

The rationale of this grow- 
ing investment effort, although 
building on a very small base 
looking back Ten years or so. 
is complex. The international 
recession, together with the 
structural ageing of the 
Japanese economy, have led to 
a declinin'; profitability of 
Japanese industries at home. In- 
creasingly therefore, they seek 


to compensate by going into 
foreign markets where higher 
profits are possible. 

The rising cost of Japanese 
labour is an important factor 
in this, so that we now see 
Japanese executives calculating 
the savings that can be made on 
The production of consumer 
electrical goods, for example, in 
various European countries 
instead of shipping them from 
Japan. And the appreciation of 
the yen has played a significant 
rote" in the greater interest 
overseas. 

A recent survey of motivation 
in foreign investment indicates 
that the development or securai 
of foreign markets is still the 
most important factor, account- 
ing for more than half of the 
reasons, but labour market 
advantages come second, avail- 
ability of raw materials third, 
and a desire to diversify and 
internationalise a corporation's 
operations ranks fourth. 

But there is a new and some- 
what unexepccied reason for 
the new urge to invest overseas 
and that u the upsurge of 
restrictions on Japanese 
products in a variety of over- 
seas market*. With charges of 
dumping, import restrictions of 
various kinds and even the 
prospect of action by the Euro- 
pean Community under GATT 
for the very vague mis- 
demeanour of withholding from 
Europe the expected fruits of 
greater access to the Japanese 
market arising from the Tokyo 
Round, the outlook for 
increasing shipments of popular 
items of consumer goods has 
palled. 


Spreading 


Now that this has spread from 
tbe relatively simple kind of 
product such as textiles and 
household goods to electronics 
and even cars, the impact of 
Western protectionism is 
gravely pondered in Tokyo 
boardrooms. Inevitably, ft adds 
weight to the inter nationally- 
oriented minority among the 
executives who have been 
consistently advocating the 
setting up of subsidiaries 
overseas. 

But other problems then 
multiply. The Japanese admit 
that they have an historically 
weak connection with almost all 
of the overseas markets where 
they would like to invest, with 
the possible exception of some 
of those in Asia — notably 
Korea, Taiwan and perhaps 
Hongkong and Singapore. 
Actually there is a political or 
cultural backlash in the ASEAN 


countries and in those deriving 
from the Chinese tradition 
because of the Pacific War. But 
this is something with which 
rhe Japanese now have had 
many decades to cope. 

Some have become quite 
successful in dealing with it, 
and after a 11 they have the 
advantage of possessing the 
new technology and the 
geographically dose big 
industrial power which the host 
countries wish to tap. But in 
Europe, or in America, the 
Japanese are still in many 
respects at sea. and this comes 
out either when a company 
tries to make a totally new 
investment or when a company 
which invested several years 
ago now seeks to expand. 

The Japanese corporations 
face an information gap over 
their overseas investment mar- 
kets. .Although the trading cor- 
porations have a renowned 
svstem for collecting informa- 
tion of all kinds from all 
countries of relevance to their 
commercial decisions, this does 
not quite add up in every case 
to a successful grasp of the 
situation on arrival at a new 
investment site. 

In particular, knowledge about 
local management, both man- 
agement personnel and manage- 
ment methods, as well as the 
role of the trades unions often 
eludes the advance party from 
Tokyo when it arrives in Scot- 
land or Georgia. Sometimes it 
does not matter, because the 
personalities on both sides fit 
and there is a sufficient degree 
of common objective as well as 
of energy and determination to 
make the thing succeed regard- 
less. But the risk of failure or of 
an insecurely-based original in- 
vent merit remains. 

To this must now be added a 
quite new problem in Europe 
and .America: a hostile local re- 
action to wtiat appears to be a 
relatively big presence of 
Japanese investment. Although 
the absolute amounts are not 
truly large, there Is a tendency 
for Japanese investment to 
“ bunch " in particular sectors, 
especially, in recent years, in 
the electricals and electronics. 
This can give rise to a feeling 
that the Japanese are trying to 
take over that industry hi some 
particular European or American 
country and make it more dif- 
ficult for the Japanese to in- 
crease their activities. 

In the UK the balance of 
Japanese investments by indus- 
try happens to be rather good, 
so that even in the electronics 
field there is no serious feeling 


of being suffocated by them. 
But the interesting story about 
Japanese investment In the UK 
in the past year has been the 
progress of the Nissan negotia- 
tions for a large car plant in 
one of the development areas. 

If this plant were to mater- 
ialise, it would transform the 
Japanese investment scene in 
Britain by putting on the map 
for the first dene a really large 
plant, whether in terms of value 
of production, throughput of 
steel plant or employment. Some 
admirers of the Japanese man- 
agement style in the 30-odd 
cases of Investment in Britain so 
far, including Sony . National 
Panasonic and YKK, wonder if 
a Japanese corporation could 
begin to impose its own way of 
management or philosophy on 
such a scale. 


Obstacle 


The particular obstacle to tbe 
success of the Nissan applica- 
tion concerns the ratio of com- 
ponents to be produced in. the 
UK as distinct from those 
brought in from Japan or third 
countries. But there are other 
problems, including the difficulty 
which the company itself seems 
to have in making up its mind 
about its international strategy. 
There is no doubt that it would 
be welcome in Britain on several 
counts; for it would provide em- 
ployment, earn export income 
and relieve the pressure on 
Britain’s trade, deficit with 
Japan- 

On the other hand there are 
die hards in the British car in- 
dustry who would claim that the 
UK-made Nissans are not to be 
considered British for market, 
purposes, and there will no 
doubt be heated arguments 
about whether the resulting 
shortfall in the voluntary re- 
straint limits observed by 
Japanese car manufacturers in 
their shipments to the UK 
should be filled after Nissan 
comes into full UK operation— 
and, if so, how. 

There are ways of avoiding 
this backlash, for example by 
spreading whatever odium may 
attach to the investment among 
a large number of companies, 
not all of them Japanese. This 
has been the strategy of JVC, 
or Victor Company of Japan. 
JVC has been led by its own 
success and the pressure of sits 
importers in Europe to set up 
plant to manufacture video disc 
players in Berlin and Newhaven 
respectively. But the ownership 
of these two enterprises goes via 
a holding company in the 
Netherlands to three equal 


partners, namely Tolefunfcen of 
West Germany, Thom-EMI and 
JVC itself. 

IT is perhaps instructive to 
see which industries go to which 
continents. In Europe sieel and 
non-ferrous metals take first 
place, followed by textiles with 
electronics third. In North 
America electronics takes Him 
place, followed by steel and 
timber. Steel and textiles 
dominate the .Asian picture, fol- 
lowed by chemicals. 

But manufacturing, at S844m, 
remains a relatively small part 
of Japanese investment n 
Europe since mining, banka eg 
and commerce each account fw 
a similar amount. 

In North America, commerce 
dominates everything else, ta:- 
Sng more than a third of fre 
total cumulative figure, while n 
Asia it is mining of which the 

same could be said. 

Asia and North America 
share almost equal honours, in 
leading the geographical dispos- 
tlon of Japan's cumulative i»* 
vestment, each with almost 
$ 10 bn or just over a quarter 
each of the total. Third come? 
Latin America with 17 per cent, 
and Europe has to settle fo* 
fourth place with 12 per cert 
or S4.5bn. Smaller amounts g* 
to Oceania, Lhe Middle East ani 
Africa. 

Tbe most favoured countries 
to host Japanese investment ai% 
in order of their importance, the 
U.S. (with SS.9bn). Indonesi: 
($4.4bn), Brazil <$2.9bm, Aus- 
tralia r$2^bn). UK f$2bDj. 
Korea, Hongkong, Saudi Arab):, 
Iran, Singapore, Canada an! 
Mexico. These were the onl 
countries enjoying in 1980 mor* 
than $800 m in cumulative 
Japanese investments. 

In the fiscal year endel 
March 1982 there was an aster 
ishing 90 per cent increase i” 
direct overseas investment t r . 
rearii a new record of $S.9br 
It was the high interest rate 
abroad which attracted a goo-' 
proportion of this record figure 
But the goal of developin' 
natural resources overseas wa> 
Illustrated by Indonesia’s junr> 
to the top of the table of inves'- 
meat hosts, with 52.4bn centring 
on the big natural gas project 
there. 

Investments to the U.S. never- 
theless were up more than ha! F 
to $2.3bn, and investments o 
Europe rose by 38 per cent o 
reach $0.8bn, although invest- 
ments in France and Britan 
actually fell. There was also a 
decline of investment in tie 
Middle East 

Dick Wilsoa 



s a bank that has been providing personalized 
financial services to industry and private 
Individuals for more than 45 years, we know that 
a smile can do muen to set people at ease and 


brighten up the atmosphere. If it is said that 
Vs a smile is contagious, then we want the whole 
***** wer’d to sn*:ie with us in creating a happier 
place far everyone to live in. You'll find 
fr enc'y smile waiting for you in our 
off*ces In the world’s major financial 
2 erv.ras. .Ye are at your service. 


1" rie-* York. Los Amnios. Seatt!? L X«.-?s--S. E-.ise';. S^gaaorc. 


A name you can bank on. 

TAIYO KOBE BANK J 

Head Office: V ooe Headquart ws: 7c-,v. . Tne Tjiya hjtr Ear* »L SA. To .5 Kct» "nance Hongi-s-g Limited 


A keen eye on 


export prices 



; . V- -V'SW'VijM 

*aP*M J> l . ii * MET „ 


II pfefl life to show you ho w its done- j 





spu-cs:--'s-.= =^:-> 
a«c.Asc-.9r-s:i-'-sfc-r*w»t 




5SSS 



' • trust w=:-=rc..ce*s£i 

-• h-;= V ^ ■ n - er - 

ra , 's-a: b vus*. services. 

•" V -r.--ts:mc'e::3."£7e:",an:ing l 


nr -f.r • p.; -— »■ 

_ , ■' - ■_ ••• -jai 1 es; 0 '.sv;<5:s,!» ' ' ‘ * 5 

V"..*’ ■ crTre^car-e-r-.s-^c'.nor , 

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.2; 3 i -i»- 


W.v v.ith a eantfile ivsTVin??- 

TOYO TRUST BANK 


The TcwTnist & Banking Co, Ltd-Tnioo- .bpan 


Lonilon Bmrcn. •' 
Bahnw Bap-Qft^- 



ALTHOUGH Japanese manufac- 
turers, like to claim nowadays 
that foreign consumers buy 
their products because of 
superior quality and reliability, 
value for money has remained 
one of the keys to the overseas 
success of most industries. 

The mam reason why 
Japanese exports are sold at 
hr-h'.y competitive prices would 
appear to be very simple. Com- 
petitive pressures inside almost 
all the main Japanese exporting 
industries are more intense 
than counierparr industries in 
most Western countries, with 
■he res:ii» that each company 
•ta> to iio i'js utmost in retain a 
price ‘*e<!ge” in order to 
survive. 

A r. exr.mple of how Japanese 
c r'ers cat: vary' thvir price 
p „•:>** rcc«Tdi::g to The market 
— :.nd according to what an 
individual company may be try- 
:n.- to cchie v e — is provided by 
rhe situation Thai has existed 
'tunny the pa*: few months in 
V 2 rvn: 9 Western martlets for 
.r.ese cars. Japanese car 
nr:ee< have ’ended to rise in 
riie L’.S. o'.er the pas? year 
I'C.iV’e ifie vni»inie of sales has 
, ; rni'C'.i i*y a " voluntary ” 
•t. r ender" .iking .-,rri rt 

'• ■*. :r •over-. 1 L’.S. nres'.-urc ) 
h: s:;:-inc uf I9S !. 
in 'w'cs?crn Europe Japanese 
i.,, r expur*.* are also under 
i _ inci-= of ” voluntary’ ” 
'••r ;n some ca>cs involuntary 1 
Ilov.ever. aciua I 

di-matid for Japanese cars in 
e o: liie markets concerned 
'i-j - caused sales 'o fa!’ beiow 
le-.cls stipuia’ed in lhe 
r.-s-Tv:n? agreement?, v.nih the 
re ‘.ha: price competition 
come info play. 

.\ ?;.pical example of a 
Vt stern market in which 


Japanese exporters are (by 
their own admission) competing 
on price is West Germany. Sales 
to rhe West German market 
were to have been held during 
1982 to not more than 10 per 
cent above the levels of 19S1 
under an informal arrangement 
arrived at between the govern- 
ments of the two countries. 
Actual demand for Japanese 
cars, however, has been running 
at less than the level a year 
ago. 

The research department of 
one major internationally 
orientated Japanese bank esti- 
mates that Japanese cars have 
to be sold in the German mar- 
ket at not more than 85 to 90 
per cent of the prices set by 
Volkswagen so as lo overcome 
what remains a continuing in- 
cimation on the part of German 
drivers to *• buy German." 

The list price of a typical 1.3 
litre Japanese sedan type car 
in rhe UK has risen about 73 per 
cent over the last five years (as 
the accompanying table shows). 
Japanese car exporters to 
Britain should theoretically have 
been in a position to raise their 
prices fairly rapidly in the UK 
— eiven that a “gentleman’s 
agreement," between the Japa- 
nese Automobile Manufacturers 
Association and the UK Society 
nf .Motor Manufacturers and 
Traders has placed a limit on 
The Japanese market share. In 
practice, however. • it appears 
that Japanese prices have risen 
rather less rapidly than UK 
makers’ price. 

One reason for the competi- 
tive pricing of ■ Japanese cars 
tallowing for differences in 
extras) cited by the Japanese 
makers rhem«elves is the divi- 
sion of the UK market into a 
private buyers' sector and a com- 
pany car sector. Company 


HOW CAR 

PRICES HAVE MOVED 

f Example o( 

one Japanese car maker's 
for a four-door 1.3 Hire 

price in i 
saloon) 

the UK market 


Retail 

£ 

Per cent 
change from 
year ago 

List 

£ 

Per cent 
change from 
year ago 

iflW Jan 

2.3-19 

+ 9.6 

2,010 

+ 10.0 

Aus 

2 .5M 

+ 19.6 

2.210 

+ 13.5 

lPTfi Jan 

2.71 4f 

+ 13J 

2.344 

+16J5 

Aug 

3.363' 

+30.1 

2.701 

+223? 

19SU Jan 

3.303 

+23.9 

2,701 

+1SJ 

Auc 

3.329 

— 12.7 

2,666 

-12.9 

J9S1 Jan 

3.399 

+ 10.7 

2,730 

+ 10.7 

Aus 

3.470 

+ 4.5 

2.7S5 

+ 4A 

msg Jan 

3.633 

+ 7.5 

2,934 

+ *.4 

May 

3.ysjH 

+ 14.S 

3.198- 

+ 14^ 

• V 


’ VAT up from 8 to 15 per cent 


CONTINUED ON NEXT PAGE 


To Future Generations, 
Security 



Social welfare is a subject of serious consid- 
eration iri most modem societies. Man in the 
twentieth' century accepts his responsibility to 
bequeath to the next generation a society 
better than his own. Dai wa. Bank is not unique 
in accepting this responsibility, but Daiwa is 
unique, in making acceptance of this role in 
. society ah integral part of their banking service. 

Daiwa is the only Japanese city bank to 
combine banking and trust business. Daiwa is 
thus a fully integrated banking institution, 
comprising banking, international financing, 
trust, pension- trust, and real estate business. 
This integration is part of our effort-to fulfil our 
social responsibility consistent with society’s 
needs in a contemporary environment. 


a fully integrated banking service 


DAIWA BANK 


Head Of Ho= GvAij. J^pan 
London Branch: Wneheste Hune. 77 London VM, Lwidon EC2N ISO 
Frankfurt Branch: Lsrherihrime: L m dgfagae M. 6000 Frankfurt an Matq 1 , 
i-R.G^rtnanv . 

Singapore BraxlnTcwer 8001-3. tJBSBufeBBfl. '6SheH!«»W«SMDon.mM 
Hong Kong Brands Rooms 704-7OSA World-Wide House, 19, DoV^eux Hg«£ 
C«i::ji. Hnrui hong 
Aemctet-rt** Var* and Los Angdes . 

RepreseataUM Offices: Sydney S*> Pd*i, Houston, Pons, Panama. Bahrafa. 
Metro and Vancouw 

SuhsMMte Daiwa Bs.^Trustb>niBmy'.'rto* KtUManSaft. 

I :.«•<*: MJ|> vjftnct , I united. Lawton 

Afna,ltlB * : ■’•T- 8 m* Ftedamo, Jakarta; Oaten Overseas Finance Limiest ffeng 


y 



/ 







Finaocial Times Monday July & 19S2 


vn 


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■? 

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■ i 

’■ ■ i 

I 

1 I 
•'“I 


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JAPAN vn 








in 





DEFENCE > PR OBLEMS have 
beea wer*adtwed by trade 
issues this year in tie minds of 
ahnwt everyone concerned vrfgt. 
the bHateral . refajtk»ship 
between Japan and 12a U.&. 
However, defence may well 
«ve the. greater long-term 
potential- as a eource of friction 
petween the wo natfom : - 

ihe reason f«r -tins is that 
while trade problems by their 
Very nature are susceptible to 
Mng' dealt -whii by " emer- 
cency”. measures such as flbe 
ptroductioa of import lfljenaM- 
ption packages, it takes time 
pd patience .to increase a 
pantry's defence capacity: 


JAPAN'S DEFENCE BUDGET 


i m 

ip9 

1980 

1981 • 

1982 


ania£ 

xm* 

2,99ft*' 


2,400.0 
■ 2*88^ 


Growth from 
previous " 
yta(%): 

‘ ■ 2M • 

10* " 
6,4 
7.6 . 

1iZ 


Satie of 
defence budget 
toGNP<%). 
<L84 
OJO 
AJI-. 

. A91 
■OM 




beea-dahmng recently that 
Japan has already committed it- 
self to‘ acqiHiing the capability 
to defend Jts sea lanes to a dis 
tance of 1,100 nautifal miles 
from Japan's coasts .{although 
no time limit seems to have 
been set for achieving this) 
Unofficially, the' Administration 
has gone on to suggest that a 
10 per cent annual rate of in* 
crease in Japanese defence 
spending might be needed to 
achieve this target. 

One direction in which the 
U.S.-Japan defence relationship 
may. develop - without significant 


we&are. If wifi almost watainly tion of the early 1970s. is mean- 
continue, to be fevoiire£o«er ingless in that. Japan's defence • 4 - , - • t . 

the. next few yeans despite the spending, if computed according 
Tan#n win . of opposition pofttirtons .to the formula used by most * f e “ IK ~°^ ;for J®® 1 

^ over a sts'ters 

^.^stsjss gp*,r^£rss ^,&y£rs** 3 s 

U.S. instead of the one-way flow 
that has existed up to now, was 


J issue. . whether or not items sutii as 

**<**** «o, JapStmbay retirement allowances for Ser- 

wC ® face- dUftcoMes in main*, vice petsonsoel are mclnded in 

: sFssarffirBfcst' c ““ ) 

feoraev^w**^ Commitment 

whole of the programme tint The fact remains, however, 
the Defence Agency is to: pro- thsuf tile conunitoieot has be- 

Th? 1 Souretical frame-work P® 8 ® “ V* P&n- - come a popular symbol of 

tneoneooai rrameworK 3^ : actaa i arithmetic of Japan’s intention not to place 


. obbies that keep a dose eye on 
roan’s defence spending, is 
: mother question. 


first aired by U.S. defence 
officials in the summer of 1981. 
The idea received an immediate 
if cautious, welcome from the 
Japanese government. 

In tbeoay, the notion that 
Japan might get Involved in a 
joint arms development pro- 


united external threat wteHe 
laintaming - forces that cOuld 


in 


[gainst a bigger attadc 
o-erdinatwxa with the U.S. 


Provisional 


Charles Smith 



prices 


-efSce probabie dr possible future powerful »> *be figure could 

uhtE*ed Sw76whicfa^?5 exp enc&tnre— tuns something be 1^ to getrfd of. The 

lat the countrv sbouJd b© able Kko tto: in the 1982 fiscal year. moment of truth, when the Ieast very stnetiy c ont rolling 
j-jr — jm — w. _ — : j — - _ Japan undertook to increase its defence bill rises above the' J 1 ®® exports- • practi ce, i t 

defence spending by 7.75 per c eiling , could' well come during i®™ 3 as J* an exception might 
cent over the previous year’s the next three years and win quite ea sily, be made for the 
wTT level to a grand total of tax the political ingenuity of V-S- by virtue of the special 

rovade the- basis for. defence. Y2,588Jm, or Sper cSt of vdwtever Cabinet isS imwer defence relationship the two 

GNP — assuming tbat ;> GNP at the time. - aratfni? alr^dy enjoy, vritian 

grows at the 5.2 per cent rate • The emphasis which’ Japan U^.-Japan 

.whidithe Government has fore- jfself p^acSon^the size of tS Securlt y Agreement 
cast for the year. For the 1983 defence budget and on ks re- Collaboration in weapons 
The 1976 outline- indudes a ? >ca I y *j r Goverrment wffl lationship wHh GNP is subtly development wold injert a posi- 
brovisional list of equipment be faced with an automatic” different from the current U:S. tive element feto the U.S. -Japan 
feat might be needed to reach in defence spending of approach to the question of what relationship at * tune when 

these objectives hut detailed 2“^ °I er d Per cent on the should be happening to Japan- problems could well be cropping 
implementation has. depended, ° f e<IU S^ t J >rogr ®S ieS «“ defence poKcy. Under the np in other swrtors. However. 

uDtonwTtoaSfflOtOTS' tave been anttor- Reagan Administration a de- some U.S. officials ajqwar to 

^ effort teem t» tare Mere ttu* It n<*t ih» awtt 

grammes” each of which has To tintit the budget the « per beai nmde to relegate the a^p rec edent for Japanese col- 
had a five-year life One reason cent iise would mean authoris- “uumbers abroach ” which laboration m weapons devdop- 
[why Japm’s defence policy dm ing ho new programmes for the characterised the Carter era and - m “t with other nations. 

« said to be at a crossroads in .oonung year and thus. in effect, to talk instead about “quafita- Whatever coarse Japan’s 
982 is that the Defence Agency filing up the idea of trying to tive” Improvezoenfe in Japan’s defence polity follows over the 
s in the final stages of ore- achieve a further qualitative ability to defend itself. One next few years, it seems likely 

jaring a new mid-term pro- improvement in Japan’s defen- gualifatrve’' improvement in that there will continue to be 

sramrne which will ran from ^ ve edacity during the first wbj™ the U.S. appears particu- basic agreement between Tokyo 

1983 to 1987 and which in baif of the l980s. But to- allow larly interested involves tiie and Washington about where 

beory should lead to the .*** defence budget to. rise by ability ofJapan todefend sea tiengs should be hea&ng com- 

■ealisatkm of the targets set out mttC S, ^ re iS? 6 bined with fairly continuous 

n 1976. would be politically controver- — particularly .those leading disagreement about the details. 

Officials at «ie Mrnfrtrv year when expenditure southwards to the Philippines 

Finance who have beenwurk- on slmostaU other Items in the *nd Guam, 
ng with the Defence Agency bu dg e t is Kkely to be frozen at U.S. official spokesmen have 
b^tTe^ of ihTn^^ ^ acttw31y 

kramme say it wffl almost red acijd. 
rertainly incorporate a. much * -The best go ess that can car* 

{larger target figure for spend- rently be made about Japan’s 
W on main defence equipment defence spending in 1983 and 
.than the 'Y2,700bn which w«s thereafter is timt the govesro- 
fwritten into the last (bat now meat will approve the intzoduc- 

to be superseded) ffveyear pro- tion of some new programmes # 

[gramme. and that spending win be CONTINUHJ FROM PREVIOUS PAGE 

The increased hill, for miK- ' aDowed to '.rise by more than : „ ' _ . 

tary hardware - reflects the the “ automatic ” margin of 6 onyers are allowed a virtually mg the list price of a car, 
agency’s de&re to boost Japan’s per cent, although perhaps not 15 Per cent discount according to one exporter, can 

loffshore defence capacity by, ranch more. "7 UK -car manufacturers who result In a quick boost to sales 

bmong other things, increasing .. •••-■’’ .accordingly have to recoup but will sooner or later damage 

ts plumed 1 procurement of F-15 n themselves on Hie private sector the exporters position (when 

fighters, ' stepping up surface JKeSOllIuQll • the market with relatively lower list prices are reflected in 

tiawal streogtii end investing in T , ^ “flj prices. Japanese car a fall in second hand prices). 

\ new air defence system. The a matters coocentm* Jeur s^es ^ of cars in a 

aoubt about aH these proposals * “? ond Questran aboqt Ja^n s m the 40 per cent of the market «ven market are a^rdinelv 
^whether the GabinetwiffSri b 7 tbe pri- SSdSb^aSg 

(here is enough money to fond JS-’SS^S ^ I ate ^ ctor ^ coxmequently dfeSSS 
them ta the context of the have no xecmnung to do. maigina iS onJyEfcrc^£ 

extreme fiscal' stringency the ‘ ^ where Ja^nese car 

Eountiy know facing. . j ^ 2%,}° m ? IIt ^ the 1 ir at “*ers admit to regulariy sell- 

1 Defence has- been a favoured . than i per highly conmetitive levels Japa- the ir cars at "dumped” 

item in Japan’s recent budgets, 01 . - iiese car exporters claim that prices is Denmark — a country 

attracting' a much .larger Defence experts have- fre- they go to great lengths to avoid apparently used as an “over- 
annual increase in spending . quently pointed out that the 1 catting their list prices in situ a- flow » ^y European as well as 
than purely domestic pro- per cent commitment, which tions where demand fails to Japanese manufacturers, 
grammes such as education or dates back to a Cabinet resolu- come up to expectation. Reduc- jjpa aese carmakers arrive at 

export prices for their cars (and 
for that matter at domestic 
prices) by a process which one 
country describes as value 
analysis. Ibis consists In 
essence of attempting to place a 
new car in the market’s exist- 
ing price structure by means of 
a detailed review of tire price 
and performance of similar cars. 
Once a company has arrived a 
notional price level for a pro- 
posed new model (or model 
modification) In a given market 
it wQl work bade' from this 
point in a cost analysis .exer- 
cise to discover irtiether the car 
can be profitably produced at 
the proposed price. 

In calculating their export 
prices against their production 
costs most Japanese industries 
have to include a forecast for 
the yen-doHar exchange rate (or 
for the exchange rate of the yen 
against whatever .other cur- 
rency the product is to be sold 
in). This need arises from the 
fact that a minority of 
Japanese exports are sold m 
terms of Japan’s domestic- cur- 
rency. The custom- of pciring 
exports in dollars means that 
Japanese exports do not' auto- 
matically become cheaper when 
the yen depreciates (as it has 
been doing recently). It may 
mean, however, that the ability 
of certain industries to export 
at a profit depends on the level 
of the exchange rate. 

Many of Japan's strongest in- 
dustries are thought to be 
capable of selling abroad with 
the yen priced at less than 200 
to the dollar (In other words in 
a strong exchange rate situa- 
tion). The Japanese textile in- 
dustry (which only- two decades 
ago provided the backbone of 
tixe nation’s export effort) be- 
longs at the opposite extreme 
but with the yen at roughly 
one dollar equals Y250, even 
the textile industry can export 
profitably. 

Japanese exports should be 
more- competitive today than at 
any time during the past two 
years. The only thing that 
seems to be lacking is the 
ability of foreign consumers to 
buy them. 


j Problem: Come up with the cash it takes to build 

an industry. 

Piroblem-solver: Marubeni. We’re troubleshooters. 



Mark^abit^ 


Having a fleet of over 150 “That's why our tramp service 
. vessels helps a lot. No matter is such an efficient link in the 
what kind of cargo, yte'y* ^got network between the Far East, 

• the ship or ships to handle rL Asia and Europe. And that's. 

But it is our computer that why our liner service linking 
assures you smooth sailings the Far East, Japan and North 
all the way. Long before we America fe-so vital. The fine 
ey^ see your cargo, all the .-with the routes, the ships, the 
- pertinent data h» been loaded experience and the computer 
into our computer. to serve your better marketing. 

Mshowaune 


London Office: c/oTatbam Bromage & Co.. Ltd. 46 St. Mary Av»i London EC3A 8EY 

Tel: 01 -283-9191. Telex:B8532T- 
’ QyflnaK Office* Vancouver, Seattle, San Francisco, Los Angeles, Chicago, Houston, 
■ ' NeW York; London, Teheran. Dubai. Singapore. Hong Kong, Manila, Sydney 

New Head Office Hibiys.Xokusai Bufding.Z-O.Udiisaiiniaidio 2-chome, Chiyoda-ku, 
Tokyo ?o 0 , Japan TaL (03) 5992211 Telex: J23310 {Effective from Nov, 9, 1981) 


Charles Smith 



Financin 

In these tight-money times, for firms — even 
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has also been an'indispen- 
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intermediary for 
many of the entre- 
preneurs whose 
ideas and ambi- 
tions triggered 
Japan's growth 
into an economic 
superpower. 




What was good 
for Japan can be good 
for other nations, too. : 

For example, several years ago 
an Indonesian firm invited * 
Marubeni to submit a bid for : 

what would become the coun-f 

try's largest textile plant. After 
careful study, Marubeni 
proposed to supply everything from blueprints 
to machines to training for the Indonesian ‘ 
engineers who would operate the plant. But . 

that still, left the question of where to find the : 

$32 million the plant would cost. With : 
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new jobs and new prosperity in Indonesia. : 

That’s just one of many examples of j 
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to building industry and stimulating trade. ; 
An approach in which financial expertise ; 
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Financial Times Monday July 5 19S2 


JAPAN vm 


Diplomatic moves to ensure supplies of raw materials 


itMMM mm m 


worked 


crat its annual volume of the vulnerability 
aiups, steel and electronics, has Japanese economy, 
been bolstered by ^ large industrial countries 
measure of good fortune. some gimiiay , 


'‘gentlcinen's ^ment“ with timej that ^SSSt 

his American counter-part pnv JO the wort Me«r 


Throughout the past tumul Frances independence cm im- Japan has very few historical position— le slightly less on TV&anzlcojmcts , Japan °° needs, and the so-called JSSSbuntem Consultations Faced with this set of un- 
tuous decade, only throneh a Ported oil or Germany's on non- ties with most of the countries American-aligned — on the eon- the other to beum unable to westernisation of the Japanese 1 ^f5^S,i n ments and supplies predictable and challenPtiB 

ehanev mmhh..u7 : -JTtRF 1 * ferrous metals, fnr namnip — she deoenda on and almost no tenuous issues surrounding the escape the political _ pressure to rt ;_ t rtn inMndi>hrMd anriHeefi on food shipments ana ph*® ^eaicmo succn- 


chancy combination of ludfand if™ 0 ™ *r example- she depends on and almost no tmitioiK diet (to include bread and beef) JSw^se place on a ‘regular ^source dependencies. «*««- 

effort has Japan maaSed fa composite picture of political links to give her lever- PIX>, the Egypt-IsraeU Treaty act in wift^e U5-- ^ mzde her par£i cularly PJL ^ set U p the 5ve Jawnwesovemnients haw 

secure xesoui^atTSri^aiS ^Panese dependence Is stagger- md so on * . _ _ SS dependent on imported grains. Santaa tor annual. teDcs ftoated^deas on ways to anefco* 


secure resources at a nriw Japanese. dependence is stagger- age m mnucucms "i;,* ” IT''~ 

a pace to satisfy h«r by contrast; Japan is more Having only recently emerged shortly after the first oil ^ ^ er 

taring industries. * mann fac- than 90 ^ ttnt dependent on as a global power, Japan finds *risits to the Middle East T> P fl t t^ P ° rt fCr ^ * £rae * 


epenaent cm imported grains, mechanism for annual ta 
Japan Is only 8 per cent self- with Australia and Canada. 


^ inousmes. Iwraas mnnlte of limit «E that her diplomatic ddlhTare wiTS Treaty. sufficient in wheat and although Although with only lw 

In recent years, however 17* key raw P materiaIs. * ” relatively underdeveloped. 5L? Somewhat Impatient with the producing most of her own hopes for success, Japan 

mjm * ey raw materials. y Prime Mi n ister, and JUTrs n f hiiatmi «f *<«»reiftnnc> her food 


ecnanihm iw . imwisvi ™ , r - j . 

ith Australia and Canada. Japan to some wnd of oroa* 
Although with only limited economic security trameworh 
,n« l Sr R S S . Jhnan has The Ohira Government mappe 


he«n striving to 
fataMIsh a network of inter- 


For just the fuel alone to run The state of relations with head, Mr Yasuhiro Nakasone, 


somewiuL uop«ueu wun me prouuaug most oi ner owu nones mr swraa, 7 ,_ n „ in ii»» 

limitations of bilateral efforts, meat does so only at the cost of been diversifying her food sup- out a_ future for Japan « 

since these are unable to more feed grain imports. In pliers by investing heavily in evolving mxm y 


network of hiter- *^^*7 p«T SKSS O^iTtoeV^e ?3Ud SSS ' *£== u^STuS- fiKStaK JgZB*** the Pacift 

SSiwift ^ b - e ported ** d an dilemma. Since the 1973 oil for assistance to development £™ ttgS£ SS.2SS SKJSLfSSl^SPLS^Jl^ SsL. _ 


^aral/mmant r*"*’* ■ i i m i wmv LCJllli OI grain, aauaii LUUl U »CU- aLTlVimu*" “j— ” — — -J. 

ups as the Iranian revolution sufficiency rate ofonly'34 per and the current government has Basin. Pacific Basil 


1 . . ^ UUIOUV.C, ycr «arr oi me lluii guvenuuciu. <mu inuuoujr noyc 

r wY T ^ f “^terial flows, ore must be imported. The tried, through a triple-stranded 
‘ rrr ?. ? variety of conn- entire supply of vital minerals, strategy, 'to maximise national 
® n which Japan depends such as nickel and alominiam, manoeuvrability in .the Middle 
and the vastly different sets of ore must be bought abroad. East. The goal has been to in- 


^ v-uuir cuuib supply or raai minerals, strategy, to maximise national Hirers, aggresarw omuiug nrdmotinv reeional Stability Japan’s IOOO security nignt- — _ fnr secure Per cent Ol 

d^iends such as nickel and alominiam, manoeuvrability in the Middle for industrial contracts has SJT ul^materaarantfie of 0 n mare evolved during the early *** ,*^53)55- in°the^Wrd tt>PP«r orc P° r cffri !L lc; “ 
t sets of ore must be bought abroad. East The goal has been to in- given Japanese companies a SSJf^SoS^SriStiSn 19m to 1972 thaSovirt Union “5! ^2? (5S Per cent), nickel ( « per 

hint in Vvan tn mut rha n.tinn.l tandfv intardanarMianplos nHtli nmrninant wila in atnrJviTi*. suppues—nmiugn parnapanon / __ World— for copper, xtac, ie_aa. ' -x ,i«. ras nor rent) andtli 


^riablw affecting output in Even to meet the national tensify interdependencies with prominent role in supplying toarapidSploym^fcracir moved into the world market as World-^or tapper, rinc, lead. ccnt ) p x (nc (45'percent) andth 

each. Japans diplomacy faces a dietary need for a key food, Opec through massive Japanese such needs as power generating in a major and unpredictable SSs-32 STC^si^fl- (74 p^r cent). Collecllvely. tte 

m * ' Europeans to help US. peace buyer; in 1973 the US. embar- * y less a^urance of political region could SLl J e f a Tanan » 

4 settlement efforts. goed soyabean exports without KbblSi^irt sometimes repository Mra« ® rfg"; 

Terror. whan m.{n. .nn, ♦« TnW nnri in Vk. rp<sOllrCt‘ nCCQS, as sum 111 a 31 »P 


A resource 
fa* resources 


EVer-’v^” the major ?dor 'STt.W 

resume aippUer if a dose any UCT« a global food shortage d eprade n ^ fa often mutual ft e P ?aplta! art 

and delicate political manoen- foUowed. with the exporter tn need of ““ 


an assured market In Japan. 








OVERSEAS DEPENDENCE OF MAJOR 
COUNTRIES ON KEY RAW MATERIALS 

West 


technology for development. 
The present Government stil 


One Japanese approach In the holds lhc tarse t of incroaitn; 
hilinoines. which sends 77 per diem in tntnt i>rie-rtrv su*- 


philippines, which sends 77 per share in tutal energy su 1 - 

cent of its copper to Japan, has p j Ies t0 30 pc r cent ly 


kSt* JSy ji: * 
iUS-'irfr.iMa 

■AKa 


spSR-^i 



Japan 

UB. 

Germany 

UK 

France 

Coal 

79.2 

SJRt 

8.7t 

L6 

57.0 

OO 

99.8 

42.3 

95^ 

18^ 

99.0 

Natural gas 

88.7 

SJS 

. 65.8 

19.5 

68.8 

Iron ore 

98.6 

29.7 

96 J9 

80.7 

44.4 

Timber 

69 J3 

ZJ& 

20.7 

72.9 

16.0 

Cotton 

100.0 

84.4t 

100.0 

100.0 

100.0 

Wheat 

93 J» 

147.lt 

o^t 

25.4 

8(L2f 


been to lubricate the flow with 2990. Pacific enerp- plats 
production incentives, such as emphasise coal as v^cll as a 
loan finance In exchange for fuel cycle, usins tfe 


loan finance In exch ange t or nuejear fuel cycle, using tH 
long-term contracts. Currently Australian deposits. Japai 


about half of the copper is ai rea dy heavily involved h 
imported as ores and concen- developing these. Another cletr 
tmfes is under such contracts c-uit «r Parnfip oo-oarration 1 


sr-isa 






Efficient use of known Tesources £■ 
and exploration for new ones are & -ttl 
more important today than ever A ■ 
before. The Bank of Tokyo itself ■ ■ 

is an excellent resource for $ ■' 
such activities. It offers clients $.] " 

a wide range of international f 
finance functions. m . >, 

Yon are assured of jrc 

reliable services to meet 
your specific needs by the 
priceless assets of experience, 
diversified activities and 
tested resources of the Bank 
of Tokyo. Knowledgeable 
bankers, investors and 
businessmen know that the Bank 
of Tokyo is the proven Japanese 
specialist in international finance. 

With its own extensive world-wide 
network, the Bank of Tokyo is an 
important part of the international 
network that determines the direction 




km 

M& ' 


t Exp orts surplus where country is more than self-sufficient. 
Source: MITT, White Paper cm Trade, 1981. 


trates is under such contracts 0 f pacific co-oprration 1 

from mines such as Atlas, which Japan’s strong commitmiMit b 
was developed with Japanese tap natural gas in Indonesia arc 
capital. Brunei at a coiwnerch! love. 

One drawback of such Maureen Wlliir 

schemes is that Japanese iViaureen vtiiu 


‘ v.; i 

*■.. •>*. fit 


Trading companies growing 


km 


JAPAN’S TRADING companies lise itself to the point of It operates 138 offices through- la the future as an indicate 

built their reputation and building up an adequate corps out the world, linked by telex for the relative efficiency c 

otrpntrtTi nn Airwt HUatprai of non-Japanese executives, or leased telecommunications different countries in exponinj. 


strength on direct bilateral 
trade between Japan and the 


of non-Japanese executives, or leased telecommunications different countries in c..porun<. 
familiar with the parent which allows information to be This comment is parlicularl 
company’s procedures and able transmitted to all these offices Inspired by the America! 


outside world. They achieved to communicate wlfli its head simultaneous^ and 24 hours a statistics. 








^ The ^e major oadiog emu- JBSB * ££. 

and ttw were hlehly geared for None of the trading company pam« achiered a mrnmrer ot ™!”P anlBS h ^^$22h?^t 
the purpose. leaders are more conscious of $334bn in 1980, which repre- at over 9--on 

4, both the need and the difficulty sented 1.7 times the Japanese overseas countries in 1980. 

Over tiie pwtfmv years the ^ achievillg ^ than their national budget and one-third Most of this, naturally, vast- 


UJS.-based subsidiaries of th- 
nine major Japanese tradin 


thrust has changed, at first 


Mo6t of this, naturally, was t> 


i...., ... i, Tir K .emu. representatives in of the GNP. They toeric respon- Japan, but more than a quarte 

London. Mr Fnijald YoSiimiBo. sibility for 56 per cent of of it was to third countries. Thi 

Deputy General Manager of Japanese imports, but only 49 Japanese reckon from all thi: 

Miterfs London branch, per cent of Japan* exports. that they, through their tradin* 

declares that the Japanese To transfer technology, the companies, are responsible |oi 
rfmE rnr^m. trading companies must “bring trading company has to have about one-tenth of worldwide 

MalbUjITO OX marUDe uorpora- Mnft V1a nnTKTAIMTtKP Tncmheis comrimilv uhn Imnurc crvma_ TI C nvnn rf t 


?»s 


iai 


Mitsurs 

declares 


Japanese 


tinn to drfJTH* tbp nrinrrties in c ^ >able nonJapanese members somebody who knows swne- U.S. exports. 

f into onr unique international thing about It These pressures In China, to take anothci 

a quite Uineiwu way. »u>n1lii,Hnn V... c n_ I.J t»h 


teamwork 


coordination have finally led Mitsubishi to example, where exporting tech 


These are, in his definition, without losing its established create a new Technology Affairs xxique and experience is poor 
international co-ordination of high standard of efficiency in Department. It Is already in- one of the Japanese tradin* 


projects, exports to the deve- communication^ and mutual volved with Batelle; the Ameri- companies alone estimates tba 


loping countries, the develop- understanding. 1 


of today’s global economy. We invite _ 
you to use our resources for your own 
purposes. 


ment of new raw materials and 


companies 


can science and technology it handles a tenth of the tot a 
of institute, and the small band of bilateral trade between Japai 


energy resources, and, finally, coarse, trained several of their scientifically qualified men in and China. Furthermore, it i 
the fostering of a complex executives from Britain as from its new department can look exporting more and mor 


network of equity Involvement other countries in Japanese, but forward to beco ming more Im- Chinese products to thir 


Active on all five continents — 


jmuVnH n 


» .imuivnun •■.niul 
«v VminbntiiL. mamal 



in worldwide business. this language is not 

The dis cerning will at once which can be 
spot the potential weak area in merely tiirough a 


ttiig language is not something portant in the future. 


countries — chemicals 


acquired If the rich areas of Japanese pharmaceuticals to South an* 


six-month exports are being withheld from Southeast 


textiles 


® lsaders in intem^kmal baril&)g stKB 1880 

BANK OF TOKYO 



OL/vk f « ‘ in w i T I li in i yy rjr gU *11 — m — w — ,■ m _ , _ — — — — - — — 

this new schedule. It is the course. It needs an absorption the trading companies, and if Europe and North America. It 
effectiveness of Japanese several years into Japanese the development of the the future it hopes to sel 

u.>.yu.uiwA> uu. ,, ... v ■ ? JananKP uvmnmv Itcrif 4e nnf /«.: : _i_- . ci. 


wuvVklVIiMkL&Al i qj_ V QMAilCwv ^ ^ — . — — — — — — ■ Jfr — — 

managers in co-ordinating society, which not many foreign Japan«e economy imeif is not Chinese ships, textile machine^ 
international projects and commercial recruits are eager to enough to sustain the kind of and machine tools. 


business involving counterparts pursue. 


growth which the trading com- All this dictates a much more 


w HI** * a*ilTlT mw.n w ■■ UWUiC4|/(U 1 a Ir — — — — ___ . .. - ™ “ < ■ — — — - — 

from numerous other countries C. Itoh, one of the most active creatiTie . ro \ e than the trading 

and cultures, using different trading corporations, has about 2rvf og^ re OT Chim roimtry companies had assumed in the 


VIMiAUW. UMU 5 UU 1 &IWIL uauiug Wlliwauuno, An. c n .i Vlt i A.. 4 I J.*l r 

languages* Can the Japanese 1J000 Japanese executives over- can(Udate V »st 

trading company Internationa- seas, and 3,000 local employees. 10 ^ ■» 


In this area there has been 
a dramatic growth. Tozaki Seiki, 
President of C. Itoh, declares 


Monopoly 

In a recent contract for a 



without any hesitation that his Nigerian power station, a lead- 
company can double its offbbore 1^8 Japanese trading company 


trade over the coming three arranged for supplies from four 
years. Last year the level continents, including equip-. 


reached was $7-3bn, and this ment from France, Canada and 
year the plan is $10tan — rising Indonesia, A trading compan? 


by 1984 to a target of 816.5bn. president, asked to name : 
These figures mean that the country in which hi s comp an' 


offshore element in C. Itoh’s was not represented by i 
total overseas trade - including branch office, be had to thin; 


bilateral trade wiH rise from for several moments befon 
just under a quarter to about coming up with a tentative 


30 per cent. 

The products which are In- 


Pertiaps Mali?" 

The final question must te 


volved here are steel and non- whether Japan will retain i 
ferrous metals, chemicals, oil monopoly over this kind tf 


and oil products, foodstuffs, international trading company 


textiles and shoes, to take the now that Its advantages fe 
most active lines. Chemical creasingly appreciated else 


plant and machine tools are where. Several government! 
also currently growing fast, have committed themselves tt 


C. Itoh has an overseas plant legislation of various kinds set 
information centre In London ting up local versions of the 


which maintains constant contact Japanese trading company, 
with European manufacturers These include not only Brazil, 
to 10,111 Euro-Japanese Mexico and South Korea but 
consortia to bid on various kinds even the U.S. Malaysia has jus' 
of Internationa project This announced its second multi 
is where the i offshore trade- and national trading house callei 
fee new role of co-ordinating Mattra. 


biggest obstacle is th- 


good example would be“. the fiuan^al one. The finincS 
558?™-*^“?* 1“ J* which a Japanese trades coir- 


^f^s ctra Y c5m r; ea w iiTStaH a 
bS££T S dTta J B3 && '“Sf 8131 * 10 “ • 

recently ccmc te™S 2 ?®S 3 £ ““ es . _ ca f it3 ' 


rteSt Z ie L ,aa r or <I< 

225- *SSP One 


order to meet the mutraet Th» _ — “ “Jr*“ w»a«rv«». unc 
tiding company fa me prime 



, Musubasht 




m^rrtifactnref able to offer the v^oritf s wid^f rifngjet 
■ .tuibocars. And the range, is . .cpmiiiudijy e^>anding<a£ 
Mitsubishr for one simpte>eakm. 'Xs- vvorsfsp zesac 

. A '.and peo^Me gct to know; the advantages ‘of t^rbd,V . : 





Mitsubishi has become one of the world’s rop ten 


Thaalo to Mit^ishi, diatageU^mar iicte.' - 



mover in putting everything lxn, ™ w « 

together, including the financing JJS 1 "* ha IL t0 , beco 5 ne national- 
and negotiating. ac *l u ^ r< f the financis! 

The offshore trade might bacJdn « »« ia required, 
conceivably come to he. regarded Dick Wflson 


The Japan 

marketing specialists 

-representation / liaison -trade / consumer research 
-market information -advertising / publicity 

Watt International 

Watt IfrfantaKw ml 


Watt International 

S T *>° W Totachcn.:^, 5^7453 




f 'l r 

ri -5 








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financial Times Monday July 5 1982 

Japan ix 

Foreign label exports play 
large part in West’s trade 

FOREIGN LABEX exports (or 

unganal Equipment Manufac- 
ture exports, as the Japanese 
prefer to coll them) pday &n 
important, if sofaraerged rofte in 
Japan’s trade -with Western 
countries. The products that 
are sedd under OEM contracts 
cover a wide range but the main 
emphasis seems to be on audio 
equipment, amaH-slze colour TV 
sets or video tape recorders. 

Such items are made in Japan 
by a manufacturer who oblige 
mgly agrees to remain anony- 
mous, and are soW in Western 
markets under the label of a 
well-known European or T7.fi. 
manufacturer. . . 


Almost oreiy major Western 
electronics manufacturer is 
involved in OEM trade with 
Japan although the ratio of 
dependence appears to vary 
sharply from one company to 
another. Among^' Japanese manu- 
facturers there are companies 
which deliberately followed an 
OEM strategy from the start 
and others which have entered 
the business onfty for special 
reasons and in isolated in- 
stances. OEM, however, has 
become an integral part of the 
complex network of relation- 
ships that binds together elec- 
tronics manufacturers fa 
different parts of the world. 

According to the Western 
companies Involved, there can 
be many reasons why products 
are sometimes “ bought fa” 
from an outside supplier rather 
than produced in.the company’s 
own factories. The majority of 
major electronic* manufac- 
turers nowadays like to offer a 
full range of products to -the 
market, but may not necessarily 
choose to spread -their own. 
manufacturing or design 
resources so widely. 



Making hirfi loudspeaker cabinets for export Companies involved in „ . . 
label manufacture accept that there ore risks because- most contracts are 

single orders 


Strong lead 


Products that are bought In 
rather than made by the com- 
pany itself may tend to be Ihose 
for which demand can fluctuate 
sharply— audio equipment is a 
case in point 

Alternatively, they may be 
items in which the Japanese 
electronics industry has built 
up such a strong lead that there 
seems iMe point In . trying to 
compete. Many European TV 
manufacturers now apparently 
buy in smaller sets from Japan 
for this: treason although., con- 
tinuing ’’to make the larger 
screen sizes in their own 
factories. 

Japanese companies have 
embarked on the OEM business 
for a number of different 
reasons. According to - one 
maker, OEM contracts represent 
an easy way of “Joadtng" a 
production line to its Ml 
capacity soon after the launch 
of a new product Another 
reason Is so that companies can 
catch up with their rivals in 
overseas markets. 

Sony Corporation (a company 


which originally tried to avoid 
OEM sales) made an early start 
in the XJJS. as an exporter of 
-transistor radios (in the late 
3#50s> but was rapidly over- 
hauled by Sanyo Electric after 
Sanyo signed up a series of 
TJ.S. companies as OEM 
customers. 

In the case of video tape 
recorders where two rival 
- Japanese ** systems " compete 
with each other for s u premacy, 
OEM contracts were used from 
the start as means of speeding 
market entry. Sony’s contract 
with Zenith (signed in February 
1977) marked a significant 
departure from its traditional 
policy of selling only under 
their Sony brand name in 
world markets. The same could 
be said for Matsushita wtudh 
followed Sony a month Inter in 
g?gn<Tig up RCA as an OEM 
customer for its VHS system. 

Although . many Japanese 
manufacturers see OEM as a 
quick and easy way - of entering 
Western _ markets, most com- 
panies also acknowledge that it 
can.. be risky,-. Contracts for 
OEM purchases of consumer pro- 
ducts usually take the form of 
pingle Orders for a certain num- 
ber of items. This may or may 
not be repeated depending on 
the “forecasts’* of' the Western 
company’s needs over a rela- 
tively short period — - say six, 
months. . In either case the 
Japanese company runs the risk 
of being •‘dumped" without 
much warning. 

Because of the dangers few 
Japanese companies would 
choose to be more than 50 per 
cent dependent on OEM orders 


(although some may exceed this 
ratio). Many companies, may 
start out as OEM exporters 
with file ultimate objective of 
la unching their own brand in a 
foreign market, but sometimes 
this process can work in reverse. 

One of Japan’s largest and 
most famous manufacturers of 
consumer electronics products 
is said to have become more in- 
terested in OEM exports 
recently because demand for its 
own brands has shown signs of 
reaching saturation point. 

Japanese companies that are 
specialists in - OEM. manufac- 
ture emphasise that there are 
skill* involved in “ringing” the 
changes so that one basic pro- 
duct design can be used to meet 
the requirements of different 
customers. Another skill is that 
of org anising a flexible pro- 
duction system. 

Variations 

Sanyo Electric — one of the 
leading OEM “practitioners" in 
the Japanese electronics in- 
dustry, claims to be able to turn 
out as ‘many as 250 variations 
per year "from one colour TV 
factory working on the formula 
of one model per day. 

Although ' OEM exports 
originated in the consumer 
electronics industry, the prac- 
tice seems to have been spread- 
ing recently to other sectors — 
notably to the professional or 
non-consumer electronics in- 
dustry. Major Japanese com- 
puter makers such as Hitachi 
and Fujitsu have entered into 
what are to all intents and 
purposes OEM export con- 
tracts for computers with com- 


panies such as National Semi- 
Conductor and Olivetti (In 
Hitachi’s case) or 1CL (in the 
case of Fujitsu). 

OEM purchasing was resorted 
to for the first time by the giant 
American computer company 
IBM at the beginning of 1981 
when it placed a contract for 
facsimile machines with 
Minolta. IBM has since also 
ordered robots from Sankyo 
SeOd. The relative openness 
with which IBM and some other 
big American companies have 
entered the OEM business con- 
trasts with the reticence shown 
by many European companies. 
- A final point that can be 
made is that OEM also occurs 
in Japan. The country boasts 
eight major brands of re- 
frigerators, but has only five 
makers. The difference is 
made up by the supply of re- 
frigerators on an OEM basis by 
the five companies which are 
manufacturers to the three 
which are not Japanese elec- 
tronics companies such as Sony 
and Toshiba have been known 
to place OEM orders for con- 
sumer electronics goods with 
makers in other Asian countries 
although in most cases with 
companies in which the 
Japanese purchaser has capital 
stake. 

It would appear from this 
that OEM trade can flow in any 
direction, and that there is no 
real limit to the type of pro- 
duct involved. So far, however, 
it has tended to be used as a 
vehicle for easing the entry of 
Japanese products into foreign 
markets. 

Charles Smith 


Fear of restrictions maintains 
voluntary export restraint 


ABOUT 20 per cent of Japan’s 
exports axe sold under some 
form of voluntary restraint, it 
is commonly believed in Tokyo. 
The words are a euphemism for 
an informal' agreement under 
which Japanese companies 
agree to hold back sales to a 
particular market 

But the voluntaiy element is 
more apparent than real. The 
companies agree to the restraint 
because they fear that worse 
restrictions will be imposed if 
they do not The buyer is 
stronger than the seller. 

Japanese industry has had to 
face such restraints since its 
re-birth after World War EL In 
1955 the U.S. Government 
insisted on Japanese companies 
voluntarily restraining cotton 
blouse exports, and by 1961 It 
had been estimated that nearly 
a third of Japanese exports to 
the U.S. were under voluntary 
restraint arrangements. 

Nothing has changed. 
Japanese car manufacturers 
agreed to hold exports to 1.68m 
in the year to March 1932 and 
the same level will be held for 
the year to March 1983. The 
restraint was undertaken in the 
face of mounting pressure in 
the U.S. Congress for formal 
restriction with the Reagan 
Administration caught in the 
middle, reluctant to tangle with 
Congress. 

Over the years the voluntary 
restraint net has spread wider 
to the extent that It is now 
called the new protectionism, 
operating outside the disci- 
plines of the General Agree- 
ment on Tariffs and Trade 
fflatt). It Is a favoured means 
of holding back imports because 
it is informal, defying the spirit 
of the Gatt disciplines, but not 
the letter, working at industry 
rather than Government level. 

“The majority of cases are 
in the U.S. and the EEC,” noted 
an official at the Ministry of 
International Trade and Indus- 
try in Tokyo, “Often they are 
in industries which are on the 
same technological level and 
they tend to be where mdus- 
tries are directly competitive. 

Precise numbers are mfficim 


to pin down. The very fa- 
fonndHty of the restraints are 
not always publicised although 
there are obvious cases. 

Ia the car industry Japanese 
manufac turers have agreed with 
their UK counterparts to hold 
sales down to a percentage share 
of the. market, while numbers 
of antes are used to put a' ceil- 
ing on exports to Belgium. In 
West Germany, local manufac- 
turers are advised of expected 


- But such in for ma l arrange- 
ments may be better "from the 
Japanese manufacturer’s point 
of view than the formal quota 
which exists in Italy or the ban 
on the import of certain types 
of vehicles by Taiwan. 

Machine tool manufactiHers 
in Japan exercise their restraint 
in a different way. They 
operate a- price cartel which 
puts a floor underneath prices. 
But tins does not necessarily 
hold back sales. Strong demand 
during fiscal 1981 led to a 41 
per cent increase in U.S. sales 
hv Japanese manufacturers to 
8715m, MITT officials' noted. 

Repeated 

In the British case, some 25 
per cent of imports from Japan 
are covered by voluntary re- 
straattt agreements. The figure 
used to be 30 per cent, but the 
amount of uncovered exports 
has increased. The restraints 
stretch into consumer electronic 
products like televisions and 
muse centres. 

The British case is repeated 
with variants throughout the 
EEC. but one of the by-products 
of the restraints, when allied to 
national sysetems of quotas, is 
to weaken the EEC position in 
its dealings with Japan! Mem- 
ber states will not give up their 
particular arrangements unless 
there is- comparable protection 
from the EEC- 

But devising an EEC regime 
is difficult in the face of differ- 
ing trade philosophies among 
the member states. So although 
the EEC is suDnosed to have a 
common external trade position. 


it is a position without a hard 
policy. 

The fear in EEC countries 
about the competitiveness of 
Japanese exports In sectors like 
motor vehides and electronics 
has been increased by the pres- 
sures of the recession. The 
vigorous expression of this fear 
has found a response in Japan. 

“In the immediate short run, 
orderly and prudent market 
behaviour on certain product 
lines should be maintained,” the 
Kei dartre n, the Japanese em- 
ployers’ federation, urged on 
the Government last AprfL 

- There seems -to be no disposi- 
tion to disagree in the Govern- 
ment but trade diplomats have 
observed that industries are not 
always amenable to official pres- 
sure for. restraint Where an in- 
dustry has dev elope d in dose 
relations with MITT, like ship- 
building, it is readier to accept 
guidance than a more indepen- 
dently-minded group like the 
car manufacturers. 

Indeed, a year before the car 
industry responded to U.S. pres- 
sure for restraint, ‘ the Japan 
Foreign Trade Council, repre- 
senting the big trading houses, 
was advising the Government 
to use its influence to hold back 
the exporters. 

The Foreign Trade CouncB 
In fact urges the concept of 
orderly marketing, which is dis- 
tinct from espouring. formal 
agreements on sales. It means 
that products should not be 
recklessly pushed into markets, 
but that careful attention should 
be paid to what the market can 
bear both ip economic and 
political terms.. 

Although the Japanese export 
push this year has slowed, it 
seems likely that Japan’s trad- 
ing partners will not reduce 
their pressure for restrained 
marketing. Indeed, the need 
for this is mentioned in the 
EEC’s dispute with Japan being 
played out in the Gatt at 
Geneva. 

“The Japanese authorities are 
requested to provide tangible 
assurances that, from 19S2 
onwards, Japan will pursue a 
policy of effective moderation 


towards the EEC as a whole 
as regards Japanese exports in 
sectors where an increase would 
cause significant problems, not- 
ably passenger cars, colour tele- 
vision sets and tubes and certain 
machine tools, including numer- 
ically controlled lathes and 
machining centres,” said the 
EEC representation. 

It is in these areas that 
restraint has been exercised, but 
it is possible that demands for 
restraint wail stretch into other 
areas like electronic compon- 
ents, computers and video tape 
recorders, not only in the EEC 
hut in the UjS. 


Vigorous 


In the face of such pressure 
it might be expected that the 
Tokyo Government would adopt 
a more vigorous attitude in 
forums like Gatt to pursue the 
free trade policies it espouses 
and which are defied by the 
voluntary restraint agreements,. 

But officials ruled this -out 
despite the fact that they argue 
Japan is as much sinned against- 
as sinning. The reason is deariy 
the general tension which sur- 
rounds Japan’s trading relations 
and file desire not- to raise 
antagonism at a time when 
Japan's own importing pro- 
cedures are under scrutiny. 

The cautious approach may 
also be related to the fact that 
although it is in Japan's 
economic interest to have easy 
access to foreign markets, 
restraints are not as significant 
in bolding back sales as the 
impact o# the recession. 

At the same time the threat 
of restraints eroding established 
market shares may be a catalyst 
for greater Japanese direct 
investment U.S. analysts have 
noted that while the car 
restraints on the U.S. market 
were being planned, Honda 
Motor and Nissan Motor decided 
to build plants In the U-S, far, 
respectively, cars and light 
tracks. And since then, Toyota 
has held discussions with 
General Motors about a joint 
small car venture. 

Pan! Cheeseright 


Britain has many things to sell to 
! Japan and there’s plenty of room 
for British goods in the Japanese 
market 

Precision and high technology 
machinery, whisky, textiles, 
chemicals ... a host of fine British 
products which the Japanese are 
■very interested in buying. 

Such traditional British exports 
to japan are increasing, but there 
is. scope for a much wider range 
of products . 

As a leading Japanese trading 
company active in the UJC, we 
axe helping to promote British 


exports and are always seeking 
new product lines for the 
! Japanese market. 

Foreign trade, however, is only 
one aspect of C Itoh. Distribution, 
business organization, information 
gathering, financing and 
management are some of our 
other capabilities through our 
worldwide representation in 80 
countries and 138 major cities. 

We are also involved in plant 
projects in Africa and 
the Middle East as 
well as rapidly 


expanding- third country trade. 

If you want to succeed in the 
Japanese or any other market, 
contact us. You’ll find our 
international expertise and 
experience surprisingly helpful. 




C.ITOH 


C. rTOH & CO, LTD. 

London Office: 76 Shoe Lane, London EC4A 3JB Phone 01-3536090 Telex: 261981 


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Financial Times Monday .Tuly 5 1932 


JAPAN X 


Concern at fluctuations 


in value of the yen 



^NOMURA 

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UNDERVALUATION OF the 
yen has made Japanese exports 
even more competitive than 
they might normally have been 
during nrach of the past year. 
It has also created serious prob- 
lems for the Japanese economy 
as - well as for many other 
countries. 

Japan attributes the yen's 
weakness, mainly against the 
U.S. dollar, to the impact of 
U.S. Interest rates on capital 
flows in and out of the country. 
European currencies weakened 
even more than the yen in 1981. 

Japanese monetary authori- 
ties have strongly denied 
charges by some overseas critics 
that they were deliberately 
keeping the yen’s value down. 
But the stepped-up dolla resell- 
ing Intervention by the Bank of 
Japan, since April this year in an 
effort to support the yen was 
partly designed to answer that 
criticism. The intervention 
failed to prevent the yen from 
falling to a two-year low of well 
below Y250 to the dollar shortly 
after the Versailles summit in 
early June. 

Until late last year there were 
widespread expectations among 
Japanese officials and bankers 
that the yen. which had fallen 
to Y247 a dollar by last August, 
would regain strength, reflect- 
ing Japan's fast-improving cur- 
rent acount fa S4.n0m surplus 
in 1981 against a S 10. 746m 
deficit m 1980) and very low 
rates of inflation (4.7 per cent in 
1981) and unemployment (2J2 
per cent in the same year). 


Recover 


The yen did recover to 
around Y214 to the dollar in 
December and the Bank of 
Japan lowered its official dis- 
count rate to 5.5 per cent from 
6.25 per cent to stimulate the 
Japanese economy into 
recovery. It was explained at 
the time that the measure was 
not intended to weaken the yen. 

The stance changed early this 
year, when the Japanese cur- 
rency began to weaken again. 
The Finance Ministry produced 
new long-term • capital account 
figures for 1981. separating 


“ ordinary” transactions from 
foreign capital movements in 
and out of gen-saki trading (a 
bond market under repurchase 
contracts). The new statistics 
showed that the heavy outflow 
of long-term capital intensified 
during the latter half of 198L 

The capital outflow mainly 
reflected interest rate differen- 
tials (6 per cent on average 
compared with the EEC and 
4} per cent with the U.S. in 
1931 according to an EEC sur- 
vey). The. outflow accelerated 
early this year, when Japanese 
investors sharply increased 
their investment in “ zero- 
coupon ” bonds — discount bonds 
issued chiefly in the Eurobond 
market to circumvent the "green 
card" plan. 

The .green card plan is a saver 
identification system to be intro- 
duced io two years’ time to put 
a stop to widespread abuse of 
tax-free for small savings 
and investments. Apart from 
the foreign exchange risks in- 
volved, zero-coupon bonds not 
only promised high income 
gains but were virtually un tax- 
able under the Japanese system 

Alarmed by the development, 
the Finance Ministry unex- 
pectedly imposed a total ban 
on the sales of zero-coupon 
bonds in Japan early in March. 
The Ministry applied adminis- 
trative guidance for this pur- 
pose. because it had no 
authority to take such a step 
under the new Foreign Ex- 
change Control Law. enforced 
abont a year before, without 
invoking the so-called *' emerg- 
ency powers." 

The yen weakened further, 
falling to around Y240 to the 
dollar in March, as it became 
apparent that Japan's economic 
performance was not so good 
as it used to be. Official 
statistics showed Japanese ex- 
ports slowing, while Japan's 
GNP declined by 0.9 per cent 
in the last quarter of 1981 from 
the previous quarter. 

This was followed by the pros- 
pect that the Japanese Govern- 
ment would incur huge 
national tax revenue shortfalls. 
One estimate puts them at 
Y8,000m in fiscal 1981 and fiscal 


1982— probably entailing the 
flotation of huge amounts uf 
deficit-covering bonds. 

As the Versailles Summit 
approached, it was feared that 
Japan’s economic policies might 
become a target or criticism 
there. A heavy intervention by 
the Bank of Japan briefly suc- 
ceeded in helping the yen to 
recover from. Y248 a dollar in 
mid-April to Y231 un May 26. 
but the currency soon fell 
again to Y245 just ahead of the 
Summit. . _ _ 

Since last March, the Bank 
of Japan has also been guiding 
Japan's short-term interest rates 
upwards to narrow differentials 
with U.S. interest rates, despite 
the wish of some Japanese gov- 
ernment leaders to lower 
interest rates to boost the 
national economy. 


Comply 


Along with the heavy dollar- 
selling intervention by the Bank 
of Japan, the Finance Ministry 
requested Japanese life insur- 
ance companies to apply self- 
restraints to their investment in 
foreign securities, including 
U.S. government bonds. In- 
surance companies had to 
comply with the request, 
because they are under official 
controls of the Finance Ministry 
in many other areas. 

Foreign exchange dealers say 
the wide fluctuations in the yen's 
value have al$o been attribut- 
able to a share increase in the 
volume of trading in ven-dollar 
exchange, both in Japan and 
overseas, since the new Foreign 
Exchange Control Law took 
effect in December, 1980. The 
trading volume now totals an 
estimated $I2.0Q0m a day. about 
half of which is done overseas. 

The volume of Enro-yen, 
Japanese currency held overseas 
os deposits or loans, is believed 
to have douhled to more than 
S20.000m. On the other hand. 
Japanese markets are still sub- 
ject to official and unofficial 
controls, which do not leave 
them open to market forces. 

This gives international 
operators the chance to antici- 
pate what Japanese authorities 
are going to do and speculate 


accordingly, although Japanese 
official* arc now trymg tu resort 
to unpredictable “ guerrilla 
tactics." Some dealers assert 
i hat • removal of the controls 
would smooth exchange rate 
fluctuations, which often swing 
sharply one way at present. 

Three options serins to ne 
open for Japanese poll.. 

makers, observers ray- Tte 

can continue rheir present poll, 
cies of reduced piecemeal inter- 
vemJon and limited controls 
over capital outflow, while suck- 
ing to their fiscal retrenchment 
stance, and thus wail uniil U.S. 
interest rates decline or the yen 
stages a natural recowry in 
anticipation of a new upsurge 
in Japanese exports. l>r they 
can invoke their "emergency 
powers ” to restrict capital out- 
flow and take steps to encourage 
capital inflow, while stepping 

up intervention. 

Such a course can be taken 
nniv as the hist resort, because 
tt will run counter to U.S. 
demand that Japanese backing 
and service industries should 
be opened wider. It could also 
become unnecessary 1 , if the U.S. 
complies with a long-standing 
Japanese request for co- 
ordinated intervention, to Sup- 
port the yen. 

A third option for Japan 
would be to switch slowly tu A 
reflationary coarse by expand- 
ing the domestic economy so 
that it can import more to 
increase its exports when the 
world economy recovers. This 
policy may not bring about an 
Immediate recovery of the yen. 
but will help Japan strengthen 
Us economy and currency in 
the long run. 

Observers also believe that 
the Tokyo offshore dollar centre 
being advocated by some 
officials and bankers will also 
'strengthen the position of The 
yen in the future. While 
domestic Japanese markets 
would still he insulated in some 
respects, the centre would 
enable Japan to coordinate its 
domestic and external policies 
better than at present to pro- 
vide further liberalisation. 


Saburo Matsukawa 


Wholesalers wield the power 


in distribution system 


JAPAN'S OLDEST and largest 
department store, Mitsukoshi, 


there. 

Goods in Europe go through 


recently admitted that it had fewer intermediate hands than 
pushed some of its suppliers in- they do in Japan. In the 


to buying the shop’s merchan- Japanese system, especially in 


dise and services. 


the food sector, a product can 


For the past three years go through two or three whole- 


Mitsukoshi 


denied 


charge, made by the country's shelves. 


salers before ending up on the 


Fair Trade Commission. 


These layers can add an aver- 


it must write to about 5,000 age of 50 per cent or more to 


During the 1960s and 1970s 
supermarkets mushroomed in 
Japan, challenging the depart- 
ment stores, the past leaders of 
the retail industry. 

But the bloom is off the boom 
and supermarkets are watching 
their sales growth fade. Already 
highly competitive in pricing 
and innovation, they are look- 
ing at ways of getting an edge 


suppliers to promise not to do the cost of an imported product by cutting ont more middlemen 


it again. 


Reports say that some Mitsu- foreign factory. 


from the time it leaves the 


koshi . employees encouraged ... In latest 564 of 4ra J e 


suppliers to 'buy goods like “? asuxes 

jewelry, tombstones and pack- “V* the government 


age tours as well as contribute t0 !?° k 24 ways . 


to special exhibitions and the ? n,00 S. ing t 5 e *** v wfa ere 
remodelling of some of its de- i™* 0 * 3 are hampered by dis- 


partment stores. It is an indi- tribution or business practices. 


cation of just how far ripples . _ also .announced that it 


can go when a large member of wou fo register business eo ti- 
the distribution system in Japan 


and so reducing costs. 

The two largest supermarket 
chains, Daiei and Ito-Yokado, 
import goods directly from 
Taiwan, South Korea, Hong 
Kong and Europe. Some of the 
smaller ones have grouped 
together for more competitive 
clout. 

One such group, Allied Import 
Company <AIC), tied up with 




tesmm' 






flexes its muscles. 

In other cases the manufac- 
turer has the upper hand over 
the retailer. Last year the 
major integrated steelmakers 
which dominate steel production 
in Japan grew increasingly con- 
cerned about the rising imports 
of cheaper steel goods, 
especially from Korea, which 
were affecting domestic prices. 

To avoid attracting the 
attention of the big steelmakers 
(and perhaps lose supplies from 
them) importers were reported 
to be using cloak and dagger 
tactics to get the steel in — 
unloading at night, rubbing the 
makers’ marks off the steel and 

using unmarked trucks to trans- 

port it Discount audio shop in Tokyo . Japan’s retail 

In other areas makers of cars, distribution system is complex and costhi 

electrical appliances, dairy pro- ^ 

ducts, cosmetics and detergents 

have a captive distribution sultants to advise foreign Safeway the leading American 
system, with their products Businessmen who want to do supermarket chain last year 
going through their own whole- business in Japan. These are all They agreed to co-operate in 
salers, sales companies, trading praiseworthy efforts but the trade and marketing informa- 
comnanies or just direct to the system has its roots in both tion and Safeway got a ehanre 
reraiier. , cutaire and habit to m^ket its Wn braSd 

Wholesalers, too, the most There are almost as many products in Japan 
complex larer nf Japan's wbcriesalers and retailers in If Japanese companies go to 

tnbimon sandwich, also wield Japan as the United States— such lengths to circumvent the 
considerable power, particularly even though the population is costly and complex distribution 
over small retailers. half that of the U.S. system, what chance do 

pey hare access to retmHng Many of the companies are foreigners have? There is little 
and manufacturing information either family businesses run by chance of beating it. Success 
which gives them good market a husband and wife or employ stories are usually of those 
knowledge. They can assume a only a few people. Historically, companies who haw joined it— 
certain amount of rift ra mar- the distribution industry w Ik either through imSEttw a 
ketang products. J Je prt an alternative for people refer- sole agent. ^ng^Ta^Lle? 
h» ve Provided financial mg from the land, says a survey company or using the skUU^S 
fo urth manufae- by Dodwell Marketing Consul- an itaWished JawmeSe 
S 3 on Ja Pan's distribution company. Japanese 

lasr year. _ ___ A Government study on the 


comnanies or just direct to the 
reraiier. 

Wholesalers, too. the most 


One North American auto 
parts manufacturer who has 
been selling windshield wiper 
blades in Japan for about 10 


icturer who has Shopping habits have also mariepHn* “ , 

s~ssrs.ss..iaL *5 sseh ffss 

for about 10 fee American housewife’s large published shortly stresses the 


^StSTSS n m S tt SL£: weekly shopping expeditiSiThi; E5S5S» te'i fiSTeS 

mbutfon system is complex Japanese counterpart still raiies nf 


SSXSr, S5KS ^TSSE, <31 KS fiSS USSR 

appears to be m ordinary part and on foot. 8 7 thTbusiness l.-.WInti h oueh 


SiSiatt 

sS-wsns*, arawis sssfeSS 

Distribution is perhaps the However the s„nwm»rt*f has helped 

sat bS 3 -SSES^ ~ 

whfoh d 0 reide 0 ”r m SSiS SlSleJ^eSwioSble ? 10 aSfleS 


share. Instead, popular foreign 
brand names are either manu- 
factured in Japan under licence, 
by joint venture companies or 
by wholly-owned subsidiaries. 
Many foreign businessmen 
already in Japan believe ihar 
a physical presence is necessaiy 
to really tackle the market. 

There is obviously no one way 
to enter the market and once 
there companies have modified 
or changed their approach to 
use the system to their best 
advantage. 

Wella Japan, a wholly-owned 
subsidiary of Wella AG. makes 
hair-care products. It was 
established in 1976 when Wella 
bought out its joint venture 
partner. 

The company uses a combina- 
tion of its own sales staff and 
wholesalers to market its pro- 
ducts throughout Japan. It 
needs wholesalers because many 
beauty salons are small and »o 
delivery volume is also small. 
The Wella sales staff tends to 
concentrate on urban areas.. - 
Canada's largest food and 
meat processors. Canada Packer, 
has also graduated through 
various steps to gain a foothold 
in Japan. 

In 1968 Canada Packers 
spotted a large potential market 
in Japan and initially appointed 
a trading house as sole agent. 
However, by 1980 the volume of 
trade had grown sufficiently to 
warrant opening Canada Packers 
Japan. It is a joint-venture com- 
pany owned 65 per cent by 
Canada Packers. 

Sales have doubled since the 
company opened its doors and 
Canada Packers Japan now 
handles about 10 per cent of the 
pork imported by Japan — (hr 
world's largest pork importer- 
through its international net- 
work. It also sells frozen and 
canned vegetables, dried beans, 
grain and fish. 

The company has followed a 
traditional distribution route 
rather than trying to carve a 
new path although it has been 
approached by two or three 
large supermarkets seckinu 
direct imports. 

The system isn’t ideal but it 
may be a necessary evil." says 
Mr Kazuzo Ebihara, president of 
Canada Packers Japan, who also 
once worked with the tradine 
company which acted as Canada 
Packers agent. 

He sees change but says it 
will be slow. There are still 
many jobs dependent on the 
wholesale and retail trade. 

The process of change may 
provide sharp-eyed newcomers 
with opportunities. Dr Dirk 
vaubod. chairman of Wella 
Japan, told a recent roundtable 
meeting sponsored by the 
Japan External Trade Organisa- 
tion that then? are stale or 
draining product lines in every 
industry where related whole 
salers would welcome new 
proposals. 


Julia Elcock 


-r - 

> ---M 







I: 


IS 


U;. 





on 


V- '■ ' 

f-TJNTEL FAIRLY recently almost 
-< an debate about . the alleged 
..inequalities of Japan's trade 
relations with Western .countries 

- focused on goods rather' than 
■services. Services tended, to "be 

.. neglected in part because Japan 
ran (and continues to run) a 
deficit on t be invisible account 
: of. its overseas balance of pay- 
ments, and partly because 

- imports and exports of services 
-ore less obviously related to 
-• employment levels tban more 
■ taxable forms of trade. 

" However, 4he tendency of 
■■ Japan's overseas critics - to 
*« neglect, its performance in the 

* services sector and to look only 
7 at manufactiuin^ iikdustriee has 
*- been corrected witb a vengeance 
r- during the past few months. 

* The new interest of the U.S. 
| Administration in tbe service 
“ sector was dramatised early this . 
. year when. Mr Mike- Mansfield, 

■j the- VS. Ambassador to Tokyo, 
° dammed in a speech that While 
3 -Japanese "banks were free to 
take over domestic American , 
L banks, no UJJ. hank oouid do 
'J the same in Japan. The daim 
1 was denied by the Japaneee Gov- 
■* eminent- — andis now explicitly 
i cont ra dicted by a clause, in 
i' Japan’s new Banking Law (in. 
J force since April) wbach says 
t that Japanese financial institu- 
< tiohs can be acquired by 

* foreBgners. -. - . 

?. Even. so, the impression has 
’ jemained that, for one roaflock or , 
1 -another, foreign companies are 
less free to penetrate Japan's 
•• financial service industries — 

■ chiefly banking, securities and 
insurance— than Japanese banks ■ 
-.are to do business in Western 

- countries.- 


ease 


V; Answer 

To what extent is this tree 
“ and if it is trim how much does ; 
' it matter? ' The short answer 
" would seem to be that foreign 
“ bastes, insurance companies, and 
" securities companies are 
' indeed less free to do business 
m Japan than Japanese com- 
• panies are in some (but not 
necessarily ail) Western coun- 
*■ tries. However, this is not the 
same thing as saying that Japan 
discriminates against foreign 
companies in the financial ser- 
vice industries sector.' : 

In theory. If hot necessarily 
always in practice, foreign 
companies are treated in the 
same manner as Japanese com- 
panies in all three- of’ -die 
industries under, consideration, 
—which, means , that -they are 
subject to 'the same regime of 
government : supervision as 
domestic companies. 
nV The foreign bAnk presence in 
m Japan looks .impressive when 


. viewed -in terms of the number, 
of banks (71)! ,thaf now have 
branches in Tokyo, hr In terms 
; of the .way the number of foreign 
banks hak grown over the past 
decade, . from fewer . than ; 25 
banks In 1970. ‘ Foreign banks, 
however, account for' only a 
little over 3 per cent of total 
loans and' discounts by banks in 
Japan and. for not much more 
than,4per cent of bank aissets. 

The average return on assets 
of forei&i banks in Japan- has 
fallen 7 steeply over the past 10 
. years and is sow tow by inter- 
national standards. ■ 

Foreign bankere attribute 
some of their problems in 
Japan to a tightiy-regujated 
local money market (which has 
made it impossible to' -raise 
funds in as many different ways 
as in many Western markets). 
-It is admitted; however, -‘•gut. 
the markets are freer th an in 
■flws past and that a fairly 
definite trend has been e&afl>- 
. lisfaed towards de-regulation of 
the banking industry. "What has 
made Kfie difficult for the foreign 
banking community, despite -tixis 
gradual trend for tfbe better, is 
a decline in overall demand 
, for. bank funds by Japanese 
companies and increasingly stiff 
competition between, foreign 
banks and domestic Japanese 
banks. 

One answer to the ' funding 
-problems of foreign backs in 
Japan would appear to be that 
they should try to acquire the- 
branch networks of d omes tic 
banks (in precisely . the same 
way 'as Japanese banks -have 
done in Cmifoima). But . the 
difficulties of doing this have 
proved' quite formidable. 
Although foreign takeovers of 
Japanese banks are permitted 
Under Japanese law there 
appears to be a marked short- 
age of Japanese banks which 
are. anxious to be taken over 
despite the fact that Ihe nation 
boasts a- total of roughly 820 
banking institutions (including 
nationwide “city” banks, 
regional banks and the smaller 
mutual or “sogo” banks). 

' The tendency for Japanese 
banks to resist takeover Is not 
limited to bids from foreigners. 
Japan's major city hanks have 
been equally unsuccessful in 
their efforts to acquire smaller 
banks — so once again it is 
extremely bard to prove , dis- 
crimination against the 
foreigner; .- : 

Foreign non-life • insurance 
companies, like foreign banks, 
hold only a modest share of the 
Japanese market (2.9 per cent 
of premiums at the last count) 
but, unlike banks, appear 


reasonably satisfied with their 
■profitability. - According to the 
manager of one foreign com- 
pany, Japan is one -of the few 
markets in the world where the 
insurance business -itself (as 
opposed to the ' investment or 
insurance company assets) 
remains a basically profitable 
-activity. 

. The other side of the coin is 
that nearly all aspects of the 
industry are strictly regulated: 
Premium rates in the non- 
marine section of the industry 
are fixed by an industry associa- 
tion which works in dose co- 
ordination, with the Ministry of 
Finance. The introduction of 
new . . .insurance products 
requires advance Iicensmg from 
the Ministry (which may take 
as much as two to three years 
to make up its mind in certain 
cases). 


light rein 


The notion that foreign com- 
panies are kept on a tight rein 
in the Japanese market— despite 
their theoretical ability to com- 
pete, on equal terms with the 
Japanese industry — has to be 
reconciled with the fact that 
some companies have accumu- 
lated a far larger share of busi- 
ness than others. The top four 
** management entities M in the 
non-life market (some of them 
representing more than one 
foreign insurance company) 
account for wen over 90 per 
cent of the total business done 
by foreigners and at least some 
of these appear quite satisfied 
with conditions in Japan. 

Unlike foreign ' non-life 
insurance companies foreign 
life Insurance companies are 
relatively recent arrivals in 
Japan (Ihe first foreign life 
insurance licence was issued in 
1973). But mdike their 
colleagues in the other half of 
tbe industry they appear to 
enjoy a substantial competitive 
edge. Japanese are the world's 
second . Ingest -holders of life 
insurance (after the US.) and 


HOW FOREIGN BANKS 
RETURNS FELL 

(return on assets— per cent)’ 


1978 

‘ 1.03 

1974 

1.19 

1975 - 

1.12 

1976 - 

0.93 

1977 . 

0.70 

; 1978 

0.60 

1979 

0.29 

1980 

0.57 


Source: International Business 
Information. 


the Industry’s, leading company, 

■ Nippon Mutual; life Insurance 
Company, recently overtook (he 
Prudential " Ufe Insurance 
Company, to become the world's 
largest life company. ; • 

The notion that the industry 
(and the general public) might 
benefit’ from a dose of external i 
competition explains why | 
foreign companies began to be j 
licensed to seB life insurance I 
in Japan from the early 1970s : 
onwards on condition that the 
products they proposed to offer , 
(or the ways In which they ! 
planned to sell them) differed 
from what was already available 
in the domestic Japanese 
market. 

Today, sax foreign companies 
(or joint ventures between 
foreign and Japanese partners) 
have been ’ licensed to sell 
Insurance to Japanese citizens 
and the foreign share of the 
market — though small— appears 
to be growing. Government 
policy towards the foreigners, 
though restrictive in the sense 
that only about one new licence 
has been Issued per year, 
appears liberal when compared 
with the total ban on licences 
for new Japanese life 
insurance companies. 

So far, however, ne foreign 
company has acquired a seat on 
the Tokyo Stock Exchange, 
although a formal bon on 
foreign membership of Ihe 
exchange was lifted early this 
year. This situation contrasts 
with the position of Homura 
Securities Company as the one 
and only Japanese securities 
company to have acquired 
membership of the New York 
Stock- Exchange. 

Apart from seeking entry to 
the Tokyo Stock Exchange, 
foreign securities companies 
have a strong interest in the 
liberalisation of controls on 
the types of securities that are 
allowed to be sold in the 
Japanese market The Ministry 
of Finance is said to' have, 
drafted guidelines for trading 
in CDs and Commercial paper, 
and can be expected to put 
them into operation when the 
yen exchange rate strengthens 
enough to justify the addi- 
tional capital outflow that 
would result from liberalisa- 
tion. 

Other securities Instruments 
that are freely traded in 
Western markets - may take 
longer to make their debut on 
the Japanese market. But the 
-barriers, as Finance Ministry 
officials are never tired erf 
pointing out, apply to the 
securities industry as a whole, 
not just to foreign companies. 

Charles Smith 


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Softer U.S. line 
on farm policies 


" JAPAN’S trade dispute witii tbe 

- 05. has turned largely into an 
1 argument over, liberalising the 

import of food, especially beef 
'and oranges, from tbe U.S. How- 
'•'ever, America's early tough 
" demand for total removal of 
V controls, appears to be soften- 
ing toward a call for a relaxa- 

- tion of barriers. In return, the 
'. US. will expect Japan to 
” promise serious efforts to clear 

the way for reform of what 

- must be one of the most iHogi- 

- cal domestic agricultural pro- 
ductiou systems ever devised. 

1 The argument over greater 
access for American and other 
' outside farm goods in Japan has 
' escalated sharpiy over the past 
1 few years. -In recent months, 
. The problem .has threatened to 
' spill over ! into protectionist 

• legislation in.-the US- Congress. 

.. Japan's, powerful farm lobbies 
. have joined bands with vows to 
take to the streets at the first 
.. sign of giving te to V:S. 
I demands. This spring, fanners 
-. slaeed the highest demonstra- 
. tions in Tokyo seen since 1977 
. and 1978-^when the U.S. won 
an increase in its quota for beef 
end orange imports. 'Hiousamls 

• of farmers marched past the 
. U.S. Embassy shouting slogans, 

some in English, such as “No 

• Mom Beef. No More Juice.’* 

In May, Japanese and ‘U.S. 
negotiators declared a truce 
’ as both sides prepared for the 
new round of negotiations, 
vrhcdijled for October, when 
' flip specific i.«sue of oranges 

• nnd beef will be brought up. 

• Even this agreement was marred 

• when The US. ‘Special Trade 
■. representative sent a letter to 

several Japanese Cabinet 
ministers ■ containing. wh*t 
appeared to be fresh demands 
■on farm goods just before the 

- Versailles summit. 

At least partly in response 
to a second -pre-summit package 
of market opening measures, 
. announced by the Japanese in 
' late May, tite Americans appear 

• to have ^decided on a less 
abrasive approach in tbe coming 
round of; negotiations. The 
package -itself barely touched 
on farm “issues, offering only 
stepped -up tariff' cuts on 1/ 
fteniq anfi increases in quotas 
for such items as: herring and 
'prepared pork. But .Americans 

’ -did fireet it as a step in The 
right direction to improving 


access to the Japanese markets. 

Perhaps more importantly, 
the U.S. has. slowly come round 
to the view that for tbe fore* 
seeable future the current farm 
trade issues will not be solved 
unless major changes are made 
in Japan’s ' domestic farm 
- system. • 

The Japanese Government has. 
yet to show much enthusiasm 
. far- a serious reform of '- the 
complex system of supports 1 and 
-subsidies which, sustain farmers. 
But it may be willing to con- 
sider- the U.S: arguments ' In 
exchange for- a compromise' on 
..the beef and orange quotas 
later this year. Any pledge on 
-tbe.part of the Government- te. 
liberalise the 22 ^categories of; 
farm items now protected (ante-' 
.ably in violation of the rules 
of the General Agreement on 
Tariffs and Traded would bring 
the farmers on to the streets in 
protest. 

“It is quite dear that mean- 
ingful access will not be 
attained if it means sacrificing, 
the Japanese farmer,” writes 
one U.S. agricultural -qfiSdal in 
a recent report. 



Food counter in a. store. Japanese eating habits 
• are under pressure from abroad 


Inefficient 

Broadly speaking,-. Japan’s 
problem boils down -to 'ineffi- 
ciency — by U.S. standards — and 
waste in nearly every area of 
farm production. A hbdge podge 
of policies support the system 
. partially through: the , national 
budget, but even more heavily 
through artificially high prices 
for. consumers. Prices in turn 
are controlled by tightly regu- 
lating imports in various ways. 

The classic instance of waste 
and inefficiency is rice, a com- 
modity which gradually has 
become less important in the 
Japanese diet. Bice consump- 
tion has fallen bn a per capita 
basis since 1962, But a system 
of subsidies has tended to keep 
production at a high level, leav- 
ing Japan with a rice stockpile 
(financed by the Government) 
equivalent to nearly half its 
annual 10m tonnes of produc- 
tion. • 

The producer, price of rice 
is Japan ts currently $1,193 per 
metric tonne, or three to four 
times- the world market price. 
Japanese consumers shoulder 
moat of that cost burden 
directly at the market 


Beef . . production, which 
interests the U.S. both as a pro- 
ducer of beef and an exporter 
of feed grains, is similarly 
muddled. The average beef 
farm raises about six head of 
cattle. . 

What the Americans would 
like Japan to do is take new 
: initiatives to rationalise things . 
like rice' production and beef 
fanning. American trade 1 would 
benefit just as much from 
increased local, production, of 
beef, and hebce consumption, 
as from more imports because 
of . the position of tbe U J. as 
a producer of feed grains. One 
rather far-fetched, suggestion is 
that Japan could do for betf 
production whta it does for 
steel, that is. devise high tech- 
nology methods of producing 
cattle efficiently using imported 
raw materials. 

' It- is generally felt that the 
powerful farm lobby, led by 
Zenchu. the umbrella organisa- 
tion for farm -co-operatives, is 
throwing up barriers to major 
imorovements in farm effi- 
ciency. Zenchu fta fi a vested 
interest in maintaining the 
status quo, no matter what the 
cost. The Ministry of Agricul- 
ture, Forestry and Fisheries, 
appears at best . to be indif- 
ferent to the idea of major 
changes. 

While the myriad problems 
facing Japanese agriculture are 
far too complex for simple solu- 
tions, the roots of the dilemma 
can be traced fairly easily. What 
went wrong .from the 1950s 
onward was that agricultural 
inefficiency became part of the 
immense price, paid for indus- 
trialisation. 

There are no simple ways to 
preserve; a proper balance 
' between industrialisation and 
agriculture in a mountainous 
country where only 34 per cent 
of the land is flat enough for 
use. Janan’K -trnuhleiJ wpt? com- 
pcnrpfled hv- the sneed wlrtr 

whlrt I* (i(>T|lwr»iJ it*? pr"nr«“lr 

“miracle." Within two decades 


tens of millions of workers had 
left the Seem for jobs in fac- 
tories and cities, leaving about 
10 per cent of the labour force 
in agriculture compared with 
30 per cent in the 1950s. 

There was, however, no such 
shift in political power from 
the countryside. The ruling 
Liberal Democratic Party 
(LDP) still depends on the 
farm vote to keep its now 
comfortable parliamentary 
mojority. 


Recognise 


The size of the problems 
being created in agriculture 
were not recognised clearly 
until the 1960s, paradoxically 
just as Japan began enjoying 
the fruits of industrialisation. 
The first and most serious prob- 
lem was that Japan became 
dependent on imported' food to 
a degree almost unprecedented 
among other industrial nations 
in the West. 

Its self-sufficiency ratio on 
farm and fishery products ; 
(using the ‘strictest calculation) 
plummeted from more than. SO 
per cent in the 1950s to 50 per 
cent in 1970. What appears to 
be an all-time low was reached 
m 1976, when Japan produced 
only 42 per cent of the food 
it needed. 

Among the other results of 
this situation, Japan grew enor- 
mously dependent mi tbe US. 
for farm imports. Japan buys 
about Sdbn to $7bn of ' agri- 
cultural goods each year, 
making it America's best farm 
customer. 

This already high dependence 
on the U.S. is one understand- 
able reason wby most Japanese 
may take a dim view of UB. 
pressure to buy even more — 
including beef and oranges — to 
help bring overall bilateral 
trade into better balance. 

Richard Hanson 



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Financial Times Monday July 5 1982 

JAPAN xn 

There are many ways of doing business Japan 
apart from exporting. Some of the foreign comp 
which manufacture or provide services are profiled n 


Gold Card success 


WESTERN- MANUFACTURED 
products may have lost a good 
deal of whatever competitive 
edge they once enjoyed in the 
Japanese Import market but 
Western services can still sell 
weU in Japan. This conclusion 
is prompted by the spectacular 
siirrgss during the past two 
years of the American Express 
yen-denominated Gold Card — 
a cash card which Japanese 
residents can use anywhere in 
the world but on which they 
are always hilled in yen. 

The Gold Card has done about 
twice as well as Am ex expected 
when it first decided to Launch 
it in the summer of 1979. How- 
ever, the card could probably 
never have been launched at 
all but for a decision toy the 
Japanese Ministry of Fin ance 
(in the summer of 1978) to 
withdraw a long-standing ban 
on the issue of credit cards 
valid for use both inside and 
outside Japan. 

Mr Jackson Huddleston, the 
Am ft man who was responsible 
for launching the Gold Card, 
thrrifcq that the Ministry of 
F inan ce withdrew its ban on 
the issue of internally and 
externally available cards as 
part of the general “ loosening 
tip ” that followed the issue in 
early 1978 of a UJS. Con- 
gressional report (the “Jones 
Report”) on U-S.-Japan trade 
problems. Ames became aware 
of the change of policy in 
August 1978 when the rival 
Diners Card (which, in the case 
of Japan, Is 75 per cent owned 
by Japanese interests) came up 
with an internationally valid 
card. It lost no time in reacting 
to the news. 

The company’s first move, in 
autumn 1978, was to launch a 
major study of the Japanese 
card market (in which Amex 


had only previously been 
involved as an issuer of external 
use “ trip M cards). On the basis 
of this study the decision was 
taken in the following summer 
to make what Mr Huddleston 
claims was the biggest “ wholly- 
owned foreign investment in 
any Japanese industry for quite 
a number of years." 

The investment was big 
because Amex decided to set 
up an integrated Japanese 
operation including computer 
and financial services. The 



target was to issue 35,000 cards 
in the first two years but the 
actual number issued was more 
than 70,000, making the Japanese 
Gold Card the most successful 
new venture ever organised by 
the Amex card division outside 
the U.S. 

The overwhelming response 
to the Gold Card came despite 
what Mr Huddleston says 
were some very serious difficul- 
ties in launching it. One of the 
first problems was to get major 
Japanese banks to co-operate in 
the handling of payments. 

A second problem was to 
arrange credit lines with 
the city banks, and a third was 
assessing credit risks on card 
users. Finally, Mr Huddleston 
says, the company faced 
extreme difficulty in recruiting 
the kinds of people it needed to 
run a highly-sophisticated 
operation. 

The Gold Card operation had 
a “core staff” of 26 when the 
project was launched but this 
had to be expanded to 200 
daring the first two years of 


the card's life and the extra 
people proved exceeding > 
difficult to find. Amex even- 
tually was able to find the 
people it needed through direct 
personal recommendation ana 
by picking up good P<*P K * 

■were being “shed bj other 
foreign companies, such as air- 
lines. • . . . 

The one problem which Ames 
did not find, according to Mir 
Huddleston, was rrouhlod with 
the Japanese authorities. He 
says the Ministry of Finance 
took a positive view or the oper- 
ation from the start, sometimes 
even helping to smooth out 
difficulties which cropped up 
with business associates in the 
private sector. To secure the 
Finance Ministry's help. Antes 
made a point of keeping the 
Ministry informed about its 
Irfans for the Gold Card and of 
sending its best people to the 
periodic meetings with officials. 

Mr Huddleston declines to 
provide figures for the current 
earnings of the yen-denomin- 
ated Gold Card. But he does 
claim that average expenditure 
by Gold Card holders is “mans’ 
times” higher than that on com- 
peting Japanese cards. Amex’s 
success in Japan obviously owes 
something to its international 
prestige as an all-round pro- 
vider of financial services. Apart 
from that some special features, 
such as a Y500.000 “cashing 
service” and the lack of an 
npper limit on cardholders' 
spending, obviously helped to 
make the Gold Card popular. 
The final verdict on its success, 
however, should probably be 
that there are still some things 
Westerners do better 1 than 
Japanese and tint running a 
cash card operation is one of 
them. 

Charles Smith 


Building on an old idea 


ALTHOUGH WESTERN' manu- 
facturers of parts and com- 
ponents have normally found 
great difficulty in winning 
customers in the Japanese motor 
industry, there are a few out- 
standing exceptions. A case in 
point is Garrett Corporation, the 
Los Angeles-based member of 
the U8. Signal Companies 
group, which specialises in heat 
transfer equipment and turbo- 
chargers. 

According to Mr Hideo 
Matsttoka, the 71-year-old retired 
diesel engine designer who runs 
the Tokyo subsidiary of Garrett 
Automotive Products, the com- 
pany Is currently supplying at 
least 80 per cent of the turbo- 
chargers used in Japanese pas- 
senger cars. Since “turbo cars" 
as the Japanese call them now 
account for between 7 and 10 
per cent of Japan’s total car 
output— com p ared with none 
three years ago— and since the 
turbocharger is a high-tech- 
nology. high value-added pro- 
duct, Garrett’s stake in tire 
Japanese market ranks as a 
major exception to the rtde that 
Japanese motor assemblers 
normally buy their equipment 
only from Japanese suppliers. 

The irony of Garrett's Japan- 
ese sales success — as its own 
executives point out — is that 
turbo chargers have been 
around for a long time, although 
not necessarily as devices for 
boosting the performance of car 
engines. The idea of using en- 
gine ex h a u st to drive a turbine 
which would then send com- 
pressed air baric into the com- 


bustion chamber of an engine 
dates back more than 50 years 
and was first applied in aircraft 
as a means of coping with the 
problem of thin air at high 
altitudes. 

Turbochargers came into 
general use in the construction 
machinery industry in the early 
1960s (where they serve to 
increase power without any 
change in the size of the engine 
to which they are fitted) and 




on diesel-powered heavy trucks 
and lorries from the middle of 
the decade. 

The event which caused the 
Japanese motor Industry to start 
looking at the possibilities of 
turbocharged passenger cars 
(and which also gave Garrett its 
chance in Japan) was the 1973 
oil crisis. This had the effect of 
shifting the balance of advan- 
tage between lowering an. en- 
gine's fuel consumption and 
raising its initial costs. It also 
meant that, if turbochargers 
were to be used profitably by 
the industry, they would have to 
be adjusted to the needs of small 
and medium-sized engines in- 
stead of the much larger en- 
gines which had been fitted with 
them in the UJS. 

Garrett’s expertise on tradi- 
tional turbocharger technology 
provided the starting point for 
the development of Japan’s first 


turbocharged cars. But both the 
American company and its Japa- 
nese associates emphasise that 
a lot of joint development work 
had to be done. The work took 
about three years, from 1974 to 
1977, and was carried out partly 
in the research divisions of the 
Japanese companies concerned 
and partly at the Garrett Cor- 
poration headquarters in Los 
Angeles. 

In addition to embarking on 
joint research activities with the 
Japanese motor industry, and 
thus in effect malting the deci- 
sion to supply the Japanese mar- 
ket with a completely new pro- 
duct Garrett decided around 
the time of the 1973 oil crisis 
that it needed a presence of its 
own in the Japanese market. 
The company accordingly termi- 
nated a licensing agreement 
with a Japanese partner which 
had been yielding rattier dis- 
disappointing results and ac- 
quired land on the banks of the 
Arakawa River in northern 
Tokyo where it built an 
assembly and service centre.- 

AID Garrett Japan KK sold 
about 400 turbochargers per 
mouth during its first year in 
business, but had achieved a 
satisfactory five fold increase in 
turnover to about 2,000 units per 
month by the time the first 
Japanese turbocar (an adapted 
version of the Nissan Cedric) 
was ready for the market in late 
1979. Today the company is 
making about 20,000 turbo- 
chargers a month and there 
seems no reason why this should 
not increase further. . 

as. 


McDonald’s keeps to the recipe 


NIHON MCDONALD’S KK is a 
joint venture formed in 1971 
between an enterprising 
Japanese businessman, Mr Den 
Fujita, and the famous U.S.- 
based fast-food hamburger 
restaurant chain. The venture 
has proved wildly successful in 
its own right, so much so that 
the US. parent is buying back 
“technology" developed in 
Japan. 

The technology in question 
involves . an on-line point of 
sales computer system, 
developed by Nihon McDonald’s, 
which links all of the company’s 
cash registers to a main com- 
puter in Tokyo. What Nihon 
McDonald's has chosen not to 
tinker with is the basic tech- 
nology for making hamburgers, 
fried potatoes- and milk shakes. 
These seem to do well enough 
in the original imported form. 

If McDonald’s has a sales 
philosophy toward Japan, it is 
Mr Fujita's strong belief that 
what sells in the UJS. will 
eventually sell to the Japanese. 

_ McDonald's is in fact the most 
risible of the numerous foreign 
entries to the Japanese fast 
food services market. This year 
the company expects finally to 
overtake in sales a leading chain 
of franchised sushi shops 
(which serve bite-sized raw fish 
on vinegared rice dishes) as the 
number one fond service chain 
in. Japan. 

After a decade of sales growth 
rates averaging 20 per cent a 
year, McDonald’s by tiie end of 
this year, will have 350 shops 
spread throughout the country. 
Its sales are expected to top 
Y72bn compared with only 
YVSfcn In 1972 when there were 
only 19 McDonald’s serving the 


country. Two years ago, in 
recognition of Nihon 
McDonald’s achievement, the 
cream of McDonald’s worldwide 
empire gathered in a Tokyo 
hotel, with over 3,000 invited 



. for a gala celebration of 

te opening in Japan of the 
chain's 5,000th outlet world- 
wide. Only in the U.S. and 
Canada do people eat more 
McDonald’s hamburgers. Even 
Nihon McDonald’s own Donald 
the clown— the Japanese 
chan ged It from Ronald, because 
of difficulty in pronouncing the 
r — was present 

The success of McDonald’s 
may be largely the result of 
aranmtic changes in. Japanese 
social and dietary habits over 
the past two decades. These have 
ieft the average Japanese much 
more inclined to accept the idea 
of- eating a patty of beef on a 
roll while standing on a pubHc 
sidewalk. The first store, in 
1971, opened on Tokyo’s main 
Ginza shopping avenue, and pro- 
vided none of the sit down 
restaurant facilities found in 
newer outlets. 

. More important for success 
appears to have been the flexi- 
bility which McDonald's of the 
US. displayed in their -approach 
to the Japanese market Mc- 
Donald’s. executives rejected 
several possible partners, includ- 
ing large trading houses which 


have brought other foreign 
chains into the country, in 
favour of Mr Den Fujita's 
medium-sized trading house, 
Fujita Shoten. 

As is often the case in joint 
ventures between partners in 
.countries- as different culturally 
as Japan and the U3-, flexibility 
on the foreign; partner’s ride 
appears to have paid off. 

Rather than insisting on a 
licensing agreement, the 
arrangement preferred in most 
countries where McDonald!? 
sells hamburgers, the. two 
partners agreed to form . a 
separate joint venture com- 
pany, dividing the equity 
equally. McDonald’s provided 
the know-how — mostly 4o the 
farm of manuals— -Mr Fujita 
provided an all Japanese .staff 
and management, and a flare 
for salesmanship and promo 
tion. 

A McDonald’s hamburger 
costs more than its US. cousin, 
but it is otherwise identical, 
right down to the pickle and 
beef patty — a good deal of 
which also comes from 
Australia. If anything, Nihon 
McDonald’s has been more 
loyal to the original. HcDohaldV 
menu than its U.S. parent. The 
only items it has added on its 
own are iced coffee, a sweet 
and corn soap. Nihon Mc- 
Donald’s belief in doing , things 
the US. way extends so far as 
to operate under licence from, 
the U.S. parent, a restaurant. 
In San Jose, California, whore 
it sends promising employees 
for .practical and cultural train- 
ing. ' • . 

Richard Hanson 


Early 

arrival 
pays off 

XN 1M4 a Swedish businecs- 
man had a simple but original 
idea which, in two decades, 
revolutionised the distribu- 
tion and storage of milk and ., 
other liquid foods. It wM tWf 
a roll of paper serird at right 
angles at either end to make 
what mathematicians can * 
-tetrahedron." represented’ 
one of the most convenient 
and cost-effective ways Of 
storing liquids. 

The tetrahedron package, 
which was find co n ceive d toy 
Mr Ruben Kb using in . MW4 
provided the starting point 
for a family-owned concern 
named Terra Pak which, from - 
its beginnings In the early 
1950s has been the only 
company in the world that 
does nothing but design and 
manufacture systems and. 
materials for liquid food 
packaging. Tetra Pak 
produced its first milk 
packaging system on the 
tetrahedron format in 1951. 
and installed its first packing, 
line in a Swedish dairy la 
1952. Three years later, the 
first Tetra Pak salesman 
arrived In Tokyo to sell pack-, 
lug systems, to the struggling 
Japanese dairy industry. 

The cmnpany'sold its first, 
packaging “line* In 1957 and. 
in 1962 (after a number of 
joint venture -partners had 
refused to enter what 
appeared to be unpromis- 
ing uno of business) 
Tetra Pak set up its own 
wholly-owned subsidiary in 
Japan. The new company 
earned revenue of Y3» (about 
£3,000) In its first year and. 
took she years to tom In a 
profit Tetra Mf» early 
arrival in Japan and ttt 
determination to stay there 
seem to have been an impoi* 
taut factor in 2rs subsequent 
success. 

Tetra Pak had three pack- 
aging lines working (under 
lease contracts) at Japanese 
dairies in 1983, hot had raised 
the figure to 38 by 1968 
and to 7* by the early 1970s— 
as the Japanese drank more 
and more milk and the dairy 
industry underwent rationali- 
sation. From the mid-1970s 
. onwards ttn business grew by. 

A 

TETRA 

/ * *K \ 


leaps and bounds to the point 
where in 1082 642 leased 
packaging systems were work- 
ing in the dairy Industry (and 
for manufacturers of liquid 
food prod nets other than 
milk) while two factories 
(near Mount Fuji and outside 
Kobe in south western Japan) 
were producing the packaging 
materials that are “fed” into 
machines to farm finished 
packages. 

The total of Tetra Pale’s 
Japanese business during 
1982 should generate about 
Y40hn - worth of sales — 
enough to make the Japanese 
subsidiary a fair-sized com- 
pany in Its own right and far 
Japan to rank among (he . 
three • largest of the 81 
markets in which the parent 
company ha* established over- 
seas subsidiaries or set up 
fiUing lines. ' Mir Bengt 
Delaryd, the Swede who now 
heads Tetra Pale’s Japanese 
subsidiary says that the 
Japanese market Is a 
costly one to operate in— 
pt* sibly the most costly of all 
-But he dearly considers the 
effort worthwhile. One result 
of living up to Japanese 
quality standards has been 
that Tetra Pak KK has 
generated know-how in 
various aspects of the packag- 
ing business that can be 
. transf er red to other countries 
'in which .the company is 
active.. 

Although' a highly 
successful venture by any 
standards, Tetra Pak KK is 
very far from dominating the 
Japanese, ffqnid food packag- 
ing industry. A major 
Japanese paper manufacturer, 
operating under licence from ' 
a UJS. company, claims the 
largest single share of the 
market far ** table top " 
packages that have become 
the moot popular milk con- . 
talner in today’s Japan. 

Mr Drirayd admits that 
Jujo Paper (the Japanese 
company concerned) is . 
probably ahead in “gabled 
top” packages but claims an 
overall lead far lctra Pak in : 
the liquid food packaging : 
business, in part on (he ’ 
strength 1 or its position as the 
only company to provide an 
M Integrated " packing service 
as opposed to supplying, 
either packing machines or 
packaging materials. 

Tetra Pak KK has more 
than this to offer. Its Japanese 
design studio and a new 
training and research estab- 
lishment can do everything 
from advise a rood manufac- 
turer on the designs to put on 
its packages to provide (ha 
basis Air- pilot marketing of 
new products. 

os. 





XIII 


Financial : Times Monday July 5 1982 


JAPAN xm 


Irish exports soar 


IRISH EXPORTS to Japan in 
1981 were twice those of 1980 
and 10 tiroes up on the 1970 
level. Xn 1982 they should 
uwrease by at least another 50 
per cent, judging by the per- 
formance of the .first three 
months. The reasons for this 
highly satisfactory performance 
are to be found at least partly 
in the efforts of the Irish Export 
Board, a “senM-state’* corpora- 
tion as the Irish ceH it, whose 
approach to export promotion is 
almost lotaBy different to that 
of- most ■ other .industrial 
countries. 

According to Michael Ander- 
son. the 31-year-old head of the 
Tokyo office of CCT (as the 
board 1 ® known— these being 
the initials, of its Irish name) 
Ireland almost never sponsors 
trade exhibitions in Tokyo and 
has made no effort to contact • 
Japanese department stores -or 
major trading companies. 
Instead CCT relies on small 
Japanese wholesalers with ' 
specialised requirements and 
on its extremely detailed know- . 
ledge of tile 1,000 or so Irish 
companies that are seriously 
involved in exporting. 

Michael - Anderson, who ? 
worked as a Maxwell House , 
brand manager before he 
joined CCT at the age of 25, 
says that his office virtually acts 
as the Tokyo branch of many 
of the companies it represents 
— not only locating- market 
opportunities but also receiving 
orders when they are- placed. 

The Dublin head office of 
CCT, working through product 
divisions corresponding to the 
main types of consumer and 
capital goods, goes even fur- 
ther than that. It is quite pre- 
pared to commission outside 
designers to produce designs to 


meet a demand that has been 
identified by its Tokyo office 
and second them to selected 
manufacturing companies. The 
one thing CCT does not do is 
finance exports, which is one 
reason why it tends to be very 
cautious in deciding which 
Irish companies -it. should 
encourage to embark on the 
time-consuming and costly' pro- 
cess of penetrating the 
Japanese market. 

Irish exports to ■ Japan, 
according to - Anderson, break 
down -into five main categories, 
starting with farm products and 



continuing with pharmaceuticals 
(where • most output comes 
from’ local subsidiaries of U.S. 
multi - nationals), specialised 
machinery, textiles and “miscel- 
laneous ” goods. It is in the’ last 
two of these, sectors, and 
especially in textiles, that the 
CCT approach seems to have 
worked particularly welL Sales 
of traditional Irish' Arran knit- 
wear have jumped from £70.000 
in 1979 to a probable £lm- 
worth this year as a result of 
the realisation by CCT officials 
that Japanese consumers 
wanted to buy the " real ” thing 
(not * merely - convincing copies 
turned out by other Far East: 
countries) and were prepared, 
to pay for iL 

After fixing on Arran 
sweaters as a growth sector in 
the Japanese market CCTtpok 
over the. job of recommending 
materials. One result .of .its 
efforts was that much of the 
knitwear Ireland sells in 


Japan today is made of silk, 
alpaca and other specialised 
fibres. An Irish sweater made Of 
alpaca wool can fetch as much 
as Y25Q.OOD (nearly £600) in a 
Japanese department store 
today compared to the £20 the 
exporters were quoting for their 
sweaters when the CCT first 
became involved. 

Fabrics have been another 
area of remarkable Irish 
success in the Japanese market 
— dating from the time when a 
famous paris-ba^ed Japanese 
designer, Taka da Kenzo, started 
specifying them in his clothes 
(which meant that Japanese 
companies making Taka da’s 
clothes under licence in Japan 
bad to do likewise). 

Other specialities include 

carpets and, rather surprisingly, 
prismatic mirrors, where 
Donnelly Mirrors (tile. Irish 
subsidiary of a U.S- principal )- 
claims between 30 and 40 per 
cent of the market . 

Considering the results it has 
been getting over the past two 
years, the Irish CCT must rank 
as one of the most cost-effec- 
tive organisations of Its kind 
in Tokto. The Tokyo office 
employs three people (its direc- 
tor and two Japanese assist- 
ants) — a seemingly .minute 
number to keep track of the 
complex and fast - changing 
Japanese * market. Michael 
Anderson stresses, however, 
that “knowing Japan” is not the 
only, or even most important, 
qualification, for trade officials 
on Tokyo postings. Still more 
important, fori anyone ' who 
wants to make the- best of the 
thousands of potential oppor- 
tunities awaiting exporters to 
Japan, is to know the industries 
in one’s own country..-- • • 

Charles Smith 


Japan has many 
export industries other 
than cars and 
electronic equipment. 
Some of the groups 
are described here 
and oyer the page. 


head 

export 


Kodak only imports 


KODAK equipment has been 
sold in Japan for more than 80 
years. Indeed, the UJS. group 
claims to have introduced mass 
market photographic products, 
but only in 1977 was Kodak 
Japan established. 

Any desire Kodak might 
have had to set up manufactur- 
ing facilities in Japan before 
then was vain — the Japanese 
Government refused to allow 
direct foreign capital invest- 
ment in the industry. By 1977 
The Japanese industry was fully 
established from- manufacturing 
down to the retail level 

So all Kodak products sold in 
Japan are imported and, with 
mtnor-*variatTons.' are the same 
as those sold tiiroughout the 
rest of the world. Kodak Japan 
executives say there are no plans 
to establish plants in Japan. . 

Kodak Japan is In fact a mar- 
keting company with staff of a 
dozen, all of who are now 
Japanese. Its main aim is to 
co-ordinate Kodak sales through 
two distributors. 

As far as the Eastman Kodak 
group as a whole is concerned, 
Kodak Japan is a .unit in the 
Asia-Africa-Austraha ■ division, 
which itself is part of the 
marketing arm on the photo- 
graphic (as opposed to chemi- 
cal) side of the group’s business. 

Within the Japanese company, 
reflecting the Eastman Kodak 
marketing pattern worldwide., 
there are six different product 
groups. First and most visible 
are the consumer market pro- 
ducts — cameras and films. Then 
there are the professional and 
finishing markets, taking in pro- 
cessing laboratories, and the 


motion picture and audio 
visual markets. 

At the same time Kodak has 
sections dealing with graphics, 
health science — this includes 
X-ray materials — and business' 
systems which embraces copier 
products. 

In Japan, Kodak’s distributor 
for the business systems end of 
the market is Kusuda Business 
Machines, while Nagase, with 
which Kodak has had a rela- 
tionship since 1923. handles the 
rest. 

Kodak will not disclose the 
size of its Japanese business. 



The figures are run together in 
the annual report with other 
operations in Asia. Africa and 
Australia. But Nagase said 
that its sales of Kodak products 
are worth Y65bn a year.. Of 
that half the sales come from 
the consumer and professional 
finishing markets with film and 
photographic papers the biggest 
sellers. 

In the film market, Kodak is 
dominated by Fuji which bolds 
about • 70 per • cent. The 
remainder is shared by Kodak 
and Konlshiroku. with Kodak’s 
share independently estimated 
at about 20 per cent. 

■ The' three' groups indeed are 
the veterans of the Japanese 
photographic industry. Konishi- 
roku dates back to around the 
turn of the century while Fuji 


was founded in the 1930s. Now 
it is Kodak's main* competitor 
worldwide. 

There are four basic categories 
of film in the market — 35mm, 
126. 110 and now Disc,' intro- 
duced in May. Kodak is active 
in all of them. But it. does 'hot 
sell cameras using 35mm film. 
This part of the camera market 
is dominated by Japanese and 
German companies. However, 
the more 35mm cameras they 
sell the better for Kodak’s film 
sales, the company says. 

The 126 film is used in the 
first generation of cartridge 
cameras and this was followed 
in 1972 by the new pocket 
cameras using IHT film.. Here 
the competition is fierce as 
Kodak vies with Canon, Fuji, 
Minolta. Pent ax and Sakura. 

In the instant photography 
market. Kodak has a new com- 
petitor. Polaroid invented the 
technique and Kodak entered 
the market in 1976. Three years 
later Fuji approached Kodak 
and asked for patent and cross- 
licensing agreements to make 
the camera which both takes a 
phtograph and produces a print 

Last year Fuji brought out its 
first system using film compat- 
ible with that of Kodak, so that 
both are set apart from Polaroid, 
which remains the market 
leader with, according to Daiwa 
Securities, 30 • per • cent of 
Japanese sales. Bat in the 
modest share remaining it looks 
as if Kodak is coming under 
pressure. .Earlier this year Fuji 
boosted production, encouraged 
by early sales of its system. 

Paul Cheeseright 


JAPAN’S ABILITY to capture 
a- large slice of almost any 
market in the world with high 
quality and very advanced, 
electronic, consumer goods has 
at- times inspired awe in the 
West. It therefore may come 
as a shock to some to learn 
that last year the hottest export 
growth item for half a dozen 
of Japan's biggest home elec- 
tronic appliance makers was 
kerosene -stoves whose most 
sophisticated electronics in- 
volve a D-cell battery. Japan, 
indeed, has discovered it holds 
a virtual monopoly on the 
world market. 

• While other . high-flying 
exports, such as home video 
tape recorders and stereos 
began to lose steam, sales of 
kerosene stoves ' (known as 
Sekiyu Sutobu in Japanese) 
have ' soared. • According . to 
industry-wide figures. . exports 
of relatively cheap and easy to 
make beating stoves to the U.S. 
(by far the biggest market out- 
side Japan itself); have tripled 
each year since 1979. In 1981. 
Sales totalled ' more than 3m 
tinits. Tbij ‘year, barring a 
warm winter, sales to Ameri- 
cans- are expected to exceed 
4m . 

Before 1979, when Americans 
first discovered bow cheap and 
efficient a one-room stove can 
be, Japan sold fewer than 
300,000 a year. Now for the 
first time, demand in the U.S. 
is likely to equal or exceed 
that in the home market. 

While a number of small 
specialised, stove makers in 
Japan are enjoying the sudden 
boom in sales, the biggest 
winners have been the giants 
of Japanese industry. Sanyo 
Electric claims to have about 
20 per. cent of the export 
market, which last year was 
almost as big as the home 
market 


Reputation 



AMONG 



Foreign Exchange 
International Finance 
Securities Investment Consulting 


S'? 

YASUDA 

TRUST AND BANKING 

ECJM TCI 0 1 >«?• 881 ’5J7 1SDTBL 9 

,«?*Sf* h iSS ,r- A ’ cr ' ul LflS A c *' ,0,M u *■*’ T * : ,213 

h .'.OP lOHjretKjn RoaH KnngftflHI Id Sj-I'ObJS* Trri oJ39r nBC HV 

bL.. — ^ - a B S Soloing. b SmAiqnAav [ c> .«ei. 3jC8a 

w B-MUMBW LlU . Mn „, B Many. aKa „ s.iofi U ip se b-m to i-s-aa 

uio mniuaiutmi w e<i _ r4 ^ 3S centre. .‘0 Bend ww Svon*v. .(Hit n s •• Wi'am r c 3' 71 

(Monfl iung] Ud. ,A VWt-eftnw fcAs>d;v/i: MuKMM Nokm wkmiKom Ho-.g r-grg 


, Rapmafiutw* 0*tK 
> Tniai and Fowkb 


i £24-42*4 

a 

i- SR 
i :0 n*. 4A 


Total sales of gas and kero- 
sene stoves were worth Y50bn 
last year. Sanyo makes its 
stoves in the “ off season ’’ at 
a plant which in other seasons 
makes such items as canned 
beer vending machines. 

Sharp Corporation whose 
reputation is based i solidly in 
video equipment and electronic 
calculators and computers, 
ranks second after Sanyo in 
stove exports. Its stove sales 
tripled last year, while VTR 
sales doubled. Though small 
in comparison with total sales, 
stoves have been hot items for 
everyone from Matsushita Elec- 
tric Industrial (the giant of 
home electronics) to Toshiba 
Corporation. 

The advantages of a small, 
easy-to-handle heating stove 
(which . costs about $200) are 
obvious to anyone who has lived 
in a Japanese-styJe house which 
lacks any central heating. 
Before about I960, when kero- 
sene stoves first began to sell 
in Japan most Japanese relied 
on small sunken “ Kotatsu.” 
where feet and hands were kept 
warm by burning charcoal. 

Prosperity broughr with it 
the luxury of being able to 
afford to keep one whole room 
in the house warm on chilly 
winter nights. Americans, after 
the second oil shock in the 
1970s. re-discovered with enthu- 
siasm the idea of using kero- 
sene to ease the cost of heating 
a whole house. ' 

Here the story reveals an 
ironic twist. Until Japanese 
companies began producing [ 
their own stoves in the early 
1960s. nearly all the oil burners 1 
in Japan were imported. By 
tbe ' time of the second oil 
crisis, there were virtually no 
U.S., or for that matter Euro- 
pean. companies making stoves 
to fill a sudden surge in demand. 

Japan, where such models as 
the UK's Aladdin BlueLight 
stove sparked a domestic boom, 
turns out to be the only country 
to rhe world mass producing 
stoves.- Even the Aladdin brand 
survives only through licensed j 
production in Japan for sale in 
the UJS. market. 

Kerosene stoves are not likely ! 
to spark any trade wars, despite : 
japan’s absolute dominance, i 
This is at least partly due to ' 
decisions by most producers to j 
export their stoves on an OEM ! 
basis for sale under U.S. brand 
names. There are in any case no 
competitors to complain -about 
losing market share, as was rhe 
case when Japan burst on the 
scene in the west with motor- 
cycles. televisions and cars. The 
experience with stoves, in fact, 
has much in common with home 
video tape recorders. In both . 
cases. The Japanese borrowed * 
the .original idea from the West, 
only to find themselves rimiallj" 
alone with a product when a 
marketing nnport unity arose. 

Richard Hanson 



that is a soli one da^ 
a liquid the next, 
and sometimes a 


The cargo in • 
question, is energy, 
and it's coal from one 
destination. Crude ■ 
oil. from another. And more and more 
often, liquid propane gas as well. 

You deal with it by building 
ships: Special carriers designed to 
carry these energy fuels in a safe, efficient 
manner. NYK. has 
these types of ships 
in service now. 

More are planned 

as energy needs change and newer energy sources are discovered. 

At present Japan derives about 70 percent of its energy requirements from 
Other nations too rely too heavily on petroleum. And 
that’s not good. We’re recommending that reliance of l 
petroleum be cut back by using alternative fuels. That’s » 
why we are operating coal carriers, LPG and crude oil 
carriers— and planning newer fuel carriers. 

We know this is not the complete answer to the 
energy problem, but it’s part of it. It may be part of 
yours too. So why not give us a - 

call. Let’s work 


together by 
diversifying into 
other sources 
of energy • • 
because we 
have the kind 
of ships to 
carry the 
fuels safely 
and - 
efficiently. 



petroleum. 



QiarUng a course 
fetffimow as well as today. 


I ■ Maid OPIIck Tokyo. Japan ■ London Branch OBIco; P&O Bldg. 9!h Floor. 193-13(1 Lead-nhall St. London E.C 3 V 4PB. England. U K. Tel. ..01 1 383 2093 
Othar Overseas Offices in Europe: ■ Peris; Tel: 285-1900 ■ Milan: Tel- 203345 ■ DusMldorf: 7ol- 64151 MHwnburg: Tel- o: 93-1 


Size. 

The Savings Banks Organization is 
Germany’s largest bank grouping with a 
combined business volume of over DM 900 billion 
- a market share of some 40 per cent - and more than half 
of the nation’s total savings deposits. Operating within the 
system are 598 independent Sparkassen and 12 Landesbanken, as 
well as 13 OffentlicheBausparkassen (Public Building Societies), which 
together maintain 18000 offices and employ a staff of over 200.000. 

Scope . 

The facilities and services of Germany’s Sparkassen permeate the entire eco- 
nomy, from the largest cities to the smallest rural areas. Together with the 
Landesbanken, which have their own offices, participations, and correspondent 
links in the world’s major financial centers, the Savings Banks Organization offers its 
clients a broad scope of international service capabilities. 

Legal Status. 

All members of the German Savings Banks Organization are public-sector financial 
institutions. The liabilities of the Sparkassen are covered by the cities and munici- 
palities where they operate. In turn, the liabilities of the Landesbanken are covered 
by their state authorities and by the regional savings banks organizations. 

Service. 

Unlike savings banks in many other countries, Sparkassen in Germany 
operate as local universal banks, providing both commercial and invest- 
ment banking services. As an integral part of Germany’s traditionally 
export-oriented economy, many Sparkassen transact considerable 
foreign business. Their facilities typically include letters of 
credit, documentary business, payments and collections, 
and guarantees. For larger scale foreign financing, the 
Sparkassen often work in tandem with the 
Landesbanken, which concentrate on 
wholesale banking. 


The 4 basic strengths of Gems 
largest banking sector. 



;!Jhe Landesbanken, which act as central banks 
for.the Sparkassen in their region, provide multiple 
wholesale banking services, ranging from 
- commercial and public-sector lending, project 
finance, and foreign trade finance to portfolio 
management, security dealing, and international 
finance - often managing or participating in 
syndicated Euroloans and Eurobond issues. For 
funding purposes, the Landesbanken are 
authorised to issue their own bearer bonds. 


For more information about Germany's largest 
banking sector, just write to: 


DEUTSCHER 

SPARKASSEN- UNO GIROVERBAND 
Simrockstrasse 4 
P.O. Box 1429 

D-5300 Bonn 1, West Germany 





XIV 



Financial Times Monday Jufe: 5 


JAPAN XIV 


Taking cosmetics to the U.S. 


n Tokyo, 
one hotel is host 
to more 
of the worlds 
most discriminatins 
travellers... 




•Tokyo, Japan 

In a class by itself 

Iwajiro Noda, Honorary Chairman 
Tatsuro Goto, President & General Manager 
Host to chiefs of state, financial leaders and executive travellers from aronnd the world. 

oneof‘%cF[^adinfiIotdsof thdWorid® 

Represented V&ridwldebyHRI * 

See your travel agent or our hotel representatives; 

HRL London Tel: 01-583-3050, Paris Tel: 01-075M3000, Berlin Tefc 308836075^ 

Frankfurt Tel: 061 1-283345. Geneva Td: 022-286566. 

Hold Okura Europe Office: Amsterdam Tab 78 71 11, 76 11 60. 


SHISEIBO is Japan's largest, 
and the world's third - largest, 
cosmetics maker but its. over- 
seas presence so far is'not very 
much more than a gleam in the 
eye of Mr Yoshiharu Fukuhara. 
the company’s general manager 
for international operations. 

Just because it has a long way 
to go in. for ■ example, 'the 
American market, however, 
Shi set do expects to go there fast. 
Oversees sales accounted ' for 
onlv 5 per cent of overall turn- 
over in 1981 but were nearly 30 
per cent up on -the previous 
year’s level. The 1982 figure 
! should be up another 30 per 
’ cent or so arid is expected -to 
represent 6J8 per cent of turn- 
over. 

When Shiseido first decided 
-to sell overseas about 25 years 
ago one of i-ts major motives 
was to improve -its image at 
home. Today, with a 30 per cent 
share of 'Japan’s domestic mar- 
ket and with the market itself 
near saturation, the company 
has other reasons for wanting to 
build an international presence. 
The chief one is that growth 
outside Japan is likely to come 
easier than growth within the 
Japanese market 
A secondary consideration is 
the need to expand overseas 
earnings so as to earn a return 


on the massive investments 
Shiseido has made over the past 
seven years in' the study of 
foreign markets and in. rhe de- 
velopment of . new products 
specifically suited to overseas 
tastes. 



For the first 15 -years or so 
after it started selling overseas, 
Shiseido simply ’* changed the 
labels " on products that had 
originally been developed for 
the Japanese market and offered 
them to customers in the U.S. or 
South East Asia. From 1973 
onwards the company realised 
that to gain a major position 
overseas it would have to change 
this strategy fundamentally. 

Shiseido accordingly began to 
develop a series of products 
specifically for overseas markets 
that were introduced to Japan 
only after they had been sold 
abroad (or sometimes riot at 
all). The products concerned 
were often manufactured out- 
side Japan and invariably made 
use of foreign designers. 

A typical example is the ' 


Nombre Noir perfume now 
being produced in France by 
Shiseido and the French 
.pharmaceutical. . manufacturer 
Pierre Fabre which entered a 
30-50 joint venture with Shiseido 
in 1980. Nombre Noir will be 
launched on. the French market 
In September this year and will 
be released shortly after that 
in Japan, arid other markets. 

Although Shiseido's overseas 
strategy is based at least In part 
on designing new products to 
match ' overseas tastes, Mr 
Fukuhara' says the company 
does not want to go too far in 
this direction. He claims That a 
certain major U.S. domestic 
maker which went all out to 
mould itself to the needs of 
foreign markets ended by losing 
its individuality altogether. 

Shiseido aims to become 
internationally acceptable while 
remaining distincively Japanese, 
which Fukuhara says is a 
slower approach to growth but 
a surer one in the long run. 

Another pre-occupation of 
Fukuhara's is to secure the 
right balance between different 
types of product? in overseas 
markets. Shiseido perfumes 
developed specifically for the 
U.S. or for Europe have been 
“well liked.” he says, but per- 
fumes tend to have shorter 
market life than more basic 


items such as skin care product* 
and it is in this area lh.il 
Shiseido wants to found U« 
overseas business in the loo;: 
run. 

So far as the pare or its over- 
sea? advance is concerned 
Shiseido- believes m consolidat- 
ing a few markets thoroughly 
' rather than trying to overrun 
too much “territory" to begin 
with. In Europe the focus at 
present is on France and West 
Germany — not on the UK 
despite the Tact that several 
leading department stores in 
Britain have expressed interest, 
Air Fukuhara says. 

In the U.S., Shiseido learned 
early on the dangers of rushing 
into the. market. From 1976 rhe 
company cut back severely on 
the number of retail outlets that 
were stocking its products and 
abandoned what is now seen to 
have been an unduly "gim- 
mick)' ” promotion policy- 

One market on which Mr 
Fukuhara clearly lias his eye. 
but about which he is not will- 
ing to say very much, is main- 
land China. The diy climate of 
Northern China, he says, means 
that skin care products are a 
basic necessity and Shiseido 
apparently would be only too 
happy to supply them. 

Charles Smith 


Share of Europe’s glass market 


Steady growth over 60 years has budt an 
operational fleet of 170 vessels for VLSL line. 
This diversified fleet has enabled us to reach 
new heights in service and experience, so today 
we can claim to have one of the world’s finest 
shipping operaSons serving ptacdcaBy every 
need in ocean trans p ortation 



YAMA5HUA-SHINNIHON STEAMSHIP CO., LTD. Head Office: Palaceudc Building, Tokyo. Japan, Td. (03) 282-7500 

Owvmoi Offices: Nm York, San Francisco, Los Angolas, Seattle, 
Chicago, Houston, Toronto, London, Dusseldorf, Kuweit. Dubai. 
Teheran, Sydney, Melbourne, Nakhodka, Sinfppora and Hong Kong 


ALTHOUGH NO Japanese 
company has sold significant 
quantities of glass to Europe 
since the 1939-45 World War 
the largest company in the 
Industry, Asahi Glass, now 
boasts a 10 per cent Euro- 
pean market share. Tt 
achieved this through the 
acquisition last year of what, 
in effect, was the entire glass 
industry .of Belgium and the 
Netherlands, from a French 
concern which had decided to 
divest itself of its glass in- 
dustry holdings. 

* The companies involved in 
the sale, which cost Asahi 
a total of about BFrs 2bn 
(S38.7m), were Glaverbel SA 
of Brussels and Machlnale 
Glasfabriek De Mass NV of 
Netherlands. They have been 
80 per cent controlled by 
Asahi as from June of last 
year and will pass wholly 
under the Japanese com- 
pany's ownership In 1983. Yet 
Asahi says that it has no plans 
to interfere with the existing 
management of either com- 
pany, or even to make them 
adopt- Japanese -^technology 
faster than they feel in- 
clined. 

Asafafs purchase of Glaver- 
bol is seen by Asahi men in 
Tokyo as the end of a senti- 
mental journey which began 
in 1907 when the then youth- 
ful Japanese company 
acquired Belgian technology 


for the manufacture of hand- 
blown glass. Because of this 
early technical association, 
glassmaking words from the 
Walloon dialect passed into 
use at Asahi’s factories. 

But’ the Belgians did not 
only export technology. 
According to Asahfs manag- 
ing director for international 
operations, Mr Kinhisa JVfus- 
hakoji, Belgian .glassmakers 
had a big market of their own 
in Japan as late as the 1930s.' 

' The arrangement ceased 
with the war — as did Asabi's 
te chnical association with 
the Belgian industry. Bat the 
Japanese continued to regard 
Belgian glassmaking with 
respect after Asahi emerged 
as world leader in the 1970s. 

According to Mr Mushakoji, 
the Japanese company made 
Its acquisition for two basic 
reasons. The first is that, in a 
world where direct trade in 
glass between developed 
nations is rapidly on the 
decline, the purchase of the 
two companies - seemed to 
represent the only chance 
Asahi wits ever likely to get 
to acquire a stake in the 
European glass industry. The 
second reason centres on the 
possibility of “synergy" be- 
tween the glass-making tech- 
nologies of Asahi and 
GlaverbeL 

Asahi expects lo purchase 
finished glass, at least in 


modest quantities, from the 
Belgian company and does 
not plan to re torn the com- 
pliment by shipping Japanese 
glass to Belgium. It would 
like to see a gradual improve- 
ment in Belgian productivity 
levels over the years and 
believes it may have some; 
thing to teach both the 


Belgians and the Dutch about 
the application of computeri- 
sation to glassmaking. How- 
ever, Asahi claims that it has 
absolutely no intention of 
reducing the Belgian or 
Dutch labour forces by lay- 
offs — despite the fact that 
lay-offs have been very much 
In the news in other parts of 
the European glass industry 
in recent months. 

Asahi’s moderation with 
regard to productivity: and 
manning levels at Glaverbel 
looks remarkable when 
viewed against the back- 
ground of employment figures 
for itself and its newly- 
acquired subsidiaries. With 
a labour force of between 
2.000 and 2.500, Asahi is the 
biggest of Japan’s three glass 


manufacturers and appears to 
be about twice the sire of 
Glaverbel in terms of annual 
sales. However, the Belgian 
company’s labour force Totals 
3,500 while its Dutch affiliate 
employs between 000 and 700 
workers. 

Next to productivity— and 
perhaps of even greater Im- 
portance as a measure of 
relative efficiency— Is the 
question of breakeven levels. 
Asahi systematically has set 
itself to achieve a profitable 
breakeven level of 70 per 
cent and is currently operat- 
ing at substantially less than 
that, whereas Glaverbel is 
currently working at 90 per 
cent of capacity and needs 
at least that to realise even a 
modest mam. 

Despite Its low-profile 
approach to the relationship 
with Its newly acquired Euro- 
pean affiliates, Asahi has one 
major investment in mind. 
This would involve the Instal- 
lation of float glass-making at 
the Dutch company {which at 
present lacks its own basic 
glassmaking facilities). 

The new float glass plant 
would cost an estimated 
Y20bn and would Increase 
basic glass manufacturing 
ca Da city of the two European 
affiliates of Asahi by 50 per 
cent. 

cs. 


Selling 
eggs on ■ 
a huge ; 

scale ; 

jvf vNESE farmer* are nor 
famous for their Intrraufodal^ 
competitive strength or fw* 
any strong Interest la MOting 
economies of scale thrmgfr; 
stepping up the sire of their 
operations. That being satt- 
seems remarkable Thu the* 
largest egg-producing wm-;- 
pany In the world should be 
Japanese. ■ ? 

The company concerned -h 
Ise KK, a 70-year-old tanri br- 
owned enterprise. When the’ 
present head of the company, 
Mr N. H. 1 st. took over hr 
the early 1950$. it employed 
30 people 310(1 boasted saint 
or >’20m. Today Sar is chart- 
ing up sales of over YGftbn 
<£l37m> per year and is 
about 20 times as large as ft* 
next biggest Japanese egg 
producer. 

Not only that, the company 
is in the process. of handing 
what will almost certainty 
come the largest egg-prodne*. 
lag operation in the 17JS. 

he’s basic idea was thftf 
egg? could he produced 40 per 
cent more cheaply in the U.8. 
than la Japan because the 
feed grains needed to rear 
laying birds were available on 
fte spot instead of having to 



Soya sauce ‘instrument of diplomacy’ 


SOYA SAUCE is an instrument 
of cultural diplomacy. At least 
that is what executives believe 
at Kikkoman, the leading Japa- 
nese producer, and they have 
international sales of Y43bn a 
year to prove it. 

“Soya sauce is one of the 
basic items in Japan's food cul- 
ture. We feel that selling in 
overseas markets means the 
propagation of Japan’s food cul- 
ture,” says Mr Yuzaburo Mogi, 
senior vice-president at Kikko- 
man and a member of the 
family which has been, in the 
soya business for more than 300 
years. ■; 

With a grandiloquence not 
normally associated with food 
flavouring manufacture, Mr 
Katsumi Mogi, -the group presi- 
dent, wrote: *' By pursuing a 
combination of technological 
innovation, product diversifica- 
tion and internationalisation, 
we are in a position to pledge 


continued and ever greater con- 
tributions to human life and 
the well-being of oar world 
society in the years ahead." 

But internationalisation and 
diversification were natural 
steps for a group already domi- 
nant in its own market At 
present its soya sauce sales 
account for 32 per cent of the 
Japanese market 

Before the 193945 . war. it 
was natural for Kikkoman to 
keep Japanese expatriates ih 
the U.S. supplied but the child- 
ren of the first-generation 
expatriates consumed less. This 
was counteracted after the war 
by the number of Americans 
who developed a taste for soya 
-sauce following stays in Japan- 


in West Germany, working on 
the maxim that the best form 
of publicity is demonstration. 

StilL international sales con- 
tributed 25 per cent of the 
group's consolidated 1981 sales 
of Y 172 bn. At home, 60 per cent 
of sales come from soya sauce 
and of the rest a half is taken 
up by. the sale of Del Monte 
tomato-based products from the 
UJ3. 

That is the due to the group's 


domestic s t r ateg y . It had a 
choice: either to seek to extend 
its share of the local soya sauce 
market, as the vehicle for 
expansion, or to diversify. It 
chose the latter. 

So in its range it now 
includes a variety of imported 
items such as Lea and Perrins 
Worcester, sauce from the UK 
and Ocean Spray cranberry 
sauces from the UJ5. 


Paul Cheeseright 


tie Imported. He also saw. 
that The U.S. egg industry 
was stack with an outdated 
and nnproQUble system of., 
producing eggs la the south' 
of the country and sffliti:;. 
them in the east, which could 
easily he improved upon 
by new ^entrants to the 
industry. 

Ise made his first major 
move into the UJS. market at 
the end of- 1981 with the 
acquisition For a total of 
518m of fear medium-sized 
production facilities on the 
, Eastern seaboard, near to The 
main areas of consumption. 

Six months after the first 
acquisition- bad been com-’ 
pletrd, Ise America (another' 
Ise subsidiary which had 
originally been established as. 
a holding company , for Sea-' 
board Foods) made a second . 

. major move into the V.! 
market, acquiring the 
production divisions of a 
major supermarket and an 
animal feed producer. The 
company Is now embarking 
on a further programme or 
direct investment in new pro* 
duction facilities in three 
east coast states (New Jersey, ‘ 
New York and Maryland). 

At the end «T phase two of 
its UJS. expansion programme' 
Ise’s American egg-laying 
farms contained a total of 8m 
adult chickens — 2m fewer 
than the largest American 
producers bat twice as many 
as the current population of - 
Ise’s Japanese farms. The 
combined total of 1 2m laying 
birds makes Ise the largest 
egg producer in the world bat 
Mr Ise is apparently not wil- 
ling to stop there. What he 
now plans to do is to develop 
the U.S. as an export base for 
egg shipments to The Middle 
East (especially Iran, Saudi ; 
Arabia and Kuwait) and, at 
-a later stage, to Japan . 

c& 


The yen’s possibilities 


Mitsubishi Trust knows best the 
possibilities of the yen. Particularly 
concerning its operation in carrying 
out projects in various parts of 
the world. We supply medium- and 
long-term finan cing in yen or other 
currencies. Our experience and 
expertise in banking and financial 
management can help you. 

Pbr further information, contact us. 


^MITSUBISHI TRUST 

andBaiddngCorporatfcn 




ni, :« ■ * > . '. **. '■ 


Ptaw 250S43, j T«toe TOOT? 84 RBWESSND^lraCe gSMTO Tmoa M TSSfl tgBCSyS 



This set Kikkoman off on the 
course which led in 1973 to the „ 
opening of a plant in Wisconsin: r 
Initial capacity of 10,000 kilo- „ 
litres a year has been expanded ’ 
to 20,000, Involving an invest- ~ 
ment of up to $S0m. 

Sales on the UB. market * 
nearly match the fall capacity 
of the plant Indeed they have 
grown consistently at 10-15 per - 
cent a year, although growth 
latterly, has been at the -.'lower 
end of the range. 

Marketing in the U.S. . is 
handled in two ways. The soya 
sauce goes through a wholesaler 
to the oriental food stores. It 
goes through a food broker—* 
a commission merchant — to the 
supermarket chains. Kikkoman, 
as a single product company in - 
the U.Sk, finds this cheaper and 
more effective than handling > r 
sales Itself. ' j 

In the ILS., 40 per wnt of 
Kikkoman's sales are in super 
markets. The proportion m 
higher in Australia at 60.. per 
cent, but there are no figure: l 
for Europe, where the grour ' 
has a wholesaler in 1 eariH' 
country. But Europe is difficult. 

European nations have by 
force of habit tended to seek, 
their soya sauce imports from ’ 
former colonies— the Nether- j - 
lands from Indonesia, for : 
example — so Kikkoman is only, 
new beginning to gain a foot-f 
hold in this market. The centre- L 
piece of its European operation £ 
is a chain of five restaurants 2 



.With the passage of time: our services only get better. - 
Our global network lets us serve you quickly, effiaenOy. 
Whatever your tanking need, 
choose Mitsui Trust. 

©MITSUI TRUST 

Ya/ w wsi trust* muwMD cojm 

'S^gSfi^«aaiisr» 

>!?»< *n££Z2iii*&£!ma Slu 

BSaaqaaaeaafisaa*" 

J^?^wRnanw(Hor^Kontf UnttM: tsni*>or.taacoieMBii*D 


\ 








I!lg 

\ i \ » - 

3 'M 

Ulv 


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"•■i* 
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Financial Times Monday July 5 1982 

JAPAN XV 

Hints, for the overseas visitor on ways 
. to establish and maintain good " 
relations with Japanese business colleagues 


GOTO PERSONAL relations 
based on mutual trust and 
esteem play a particularly 
important .role in doing busi- 
ness in Japan. Hospitality given 
and received can play a useful 
part ip maintaining and estab- 
lishing such relations. In Japan 
ft ** «rongh for the visitor to 
offer dinner in his hotel; he is 
not expected to reciprocate 
lavish entertaining on the 
Japanese scale. 

The Japanese do not expect 
foreigners to understand the 
finea* points of - their - - own 
etiquette but they Hke people 
who try to conform. Shoes are 
removed before entering 
Japanese-styie bouses and 
restaurants. 

- Japanese meals consist 
of a series of small dishes. 
Naturally, the polite thing to do 
is to- eat what one is offered 
but Japanese hosts are under- 
standing is a foreigner explains 
that he finds a particular dish 
unappetising. 

. The suffix San to the family 
name equates to Mr, Mrs or 
Mias, and should invariably be 
used when addressing- a 
Japanese, eg a Mr T. Suzuki 
would be addressed as Susuki- 
son. It is never used about 
oneself. 

In Japan it Is the almost 
Invariable custom to exchange 
visaing cards when one makes a 
new acquaintance. This is use- 
ful to the foreign visitor and it 



is advisable • to take . a. sub- 
stantial number of cards (say 

at least. 100) for use in' Japan. 
Cards printed with a Japanese 
translation on one side are of 
particular value. The Loudon, 
offices .of British Airways offer 
this service to business visitors 
but at least four weeks' notice 
is required. In case of need, 
cards can be printed fairly 
quickly -and 'cheaply by a local 
printer.' Many Japanese busi- 
nessmen ' are _ ■ enthusiastic 
golfe rs and are ‘ready to 
arrange a game (and the loan 
of chibs) for ■ foreign business 
contacts. Green fees are high, 
however. 

The custom of giving gifts fo 
business and personal acquaint- 


ances is more common than in 
most '--other countries. Mostly 
these are fairly small items and 
It is not necessary to reciprocate 
immediately although it is’ 
customary to give something 
hack in due course for personal 
presents received from 
individuals. It may be useful to 
take a number of souvenir 
items such as English r-Hina . 
company pens or ties to give 
away on - , suitable occasions. 
Very high quality- Scotch 
whisky also makes an accept- 
able gift. All gifts should be 
carefully wrapped in gift wrap- 
ping paper. 

The Japanese are always 
pleased when a foreigner makes 
an attempt, however modest,' to 
understand and use their lan- 
guage.. A wide range of useful 
conversation handbooks is avail- 
able. But it is a very difficult 
language, with an extremely- 
complicated script, and some 
-years of --fun-time study' are 
needed to master It. 

Although most educated 
Japanese can read some English, 
-the - number of Japanese who 
speak good English is limited. 
Business visitors should assume 
that their contacts cannot work 
in English and should, there- 
fore, be ready to use an inter- 
preter until they have clearly 
established that this is not neces- 
sary. 

The four main Islands of 
Japan experience a wide variety 


of cHmatie conditions ranging 
from intense cold in the north 
during the winter to a sub-tropi- 
cal climate in the south. On the 
main island summer tempera- 
tures rise: to about S5“C 
(95°F) and in the winter fall to 
about — 1*C (S0‘F). 

The seasons are weti defined 
and almost coincide with those 
of Britain. Early autumn can 
be wet and subject •to typhoons 
but -there .are. also good sunny 
spells. The;. winter Is mainly 
very dry wife long spells of 
brighr sunny weather in most of 
Honrirai.- (including Tokyo) and 
Kyusbu. 

There are usually light snow 
falls in the areas in January 
and February whereas, northern 
Honshu ‘ and . Hokkaido 
experience very heavy snows. 

From mid-October to April 
clothing as worn in Britain for 
the appropriate season is suit- 
able for both men and women, 
although visitors should bear in 
mind that "Western-style hotels 
and modern offices are heated to 
American temperatures. Lighter 
wear is needed in the spring and 
early autumn; in summer tropi- 
cal-weight clothing Is required. 
The laundering and dry-clean- 
ing services are efficient, fast 
and reasonably priced; hotels 
can offer a same-day service. * 

Deta&s for this Businessman's 
Guide were supplied by the 
British Overseas Trade Board, 


TRAVEL 

AIR The three principal 
domestic airlin es, Japan. Air- 
lines, All Nippon Airways and 
Toa Domestic Airlines between 
them provide an extensive 
service covering the main cities 
and provincial towns of Japan. 
RAIL There. are frequent and 
very fast services on the New 
Tokaido Lise (Shinkansen) 
between Tokyo . and Osaka via 
Nagoya and Kyoto. There are 
two services: Hikari and 
Kodama. Hikari does the 
journey from Tokyo to Osaka 
in 3 hours and 10 minutes, 
stopping en route at Nagoya 
and Kyoto only. Kodama takes 
four hours for the journey to 
Osaka, making 11 stops. All 
trains are air conditioned with 
restaurant and buffet service: 

Telephone calls to Tokyo, 
Yokohama, Nagtfya, Kyoto and 
Osaka can be made and re- 
ceived en route. Seats should 
be booked in advance, and at 
peak seasons it is advisable to 
do so. The New Tokaido Line 
was extended in 1975 to Hakata, 
in Kyushu. Other railways with 
frequent. . services and many 
expresses cover the rest of the 
country. . ■; . _ 

Efficient underground rail- 
way services operate in Tokyo. 
Yokohama, Osaka, - Nagoya, 
Sapporo and can be used with- 
out much difficulty: -Station 
names are in Roman lettering 
as well as Japanese. 

ROADS Extensive road-build- 
ing programmes, including 
motorways, are under way and 
an excellent motorway connects 
Tokyo, Osaka and Kobe. 
Generally, however, roads out- 
side the main cities are very 
crowded and • long-distance 
travel by road is not 
recommended. 

TAXIS Although they can 
occasionally be hired by tele- 
phone, it is usually much 
quicker to seek one at the hotel 
entrance or to wave one down in 


the street. Taxis in the large 
cities are usually plentiful, 
although on rainy' days and late 
night taxis can be. very 'di fficult 
to find. The mintmtun taxi fare 
is- Y380 with increases for late 
night • hire (no tipping). 
Addresses of buildings in Japan 
foDow a complex area number- 
ing system. Very few] streets 
in Tokyo have names and, even- 
when they have, the street 
name is not part of the address. 
Finding an address in Tokyo 
and other Japanese cities is not 
therefore an easy matter. A 
further difficulty is that the 
Japanese cannot easily read 
addresses written In romanised 
letters. 

A business visitor sHould try 
to get someone to write the 
address be seeks in Japanese; 
if he can obtain a map showing 
the location of the firm he 
wishes to visit, so much the 
better. Few taxi drivers under- 
stand much English and few 
seem to know Tokyo well. 
Visitors are therefore advised 
to have the name and address 
(including the name of a land- 
mark or building nearby and if 
possible the telephone number) 
of their destination written iu 
Japanese to -show to the driver. 
Hotels'; can., help is providing 
this. .; „ \" 

If the driver cannot locate the 
office he may be willing- to tele- 
phone the -Japanese firm for 
instructions on how to get 
there. _ 

CAR HIRE Taxis are suffi- 
cient for most occasions but 
self-drive - and chauffeur-driven 
cars can .be hired. - Unless the 
British visitor has. a very good 
knowledge of the local 
geography, and a reasonable 
command of the language, he 
would be ill-advised to use a 
self-drive hire car; .a visitor 
who intends to hire a self-drive 
car should have possession of 
an International Driving 
Licence. 

Tbe-cost of hiring a chauffeur- 


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of exquisitely landscaped 
Japanese gardens. 



500 spacious gnest rooms and suites. 

9 distinctive restaurants, bar and.cocktail lounges. 

A grand ballroom with simultaneous 
translation facilities. 

9 medium and small banquet rooms. 

— • — 

Indoor swimming P™ 1 - sauna ’ health club, 
shopping arcade 

We after quiet ffaniNY and personalized service. . 

Miyako Hotel Tokyo 

ehaaaanM Uhnme. MiiHln-k". Tnkjn KB. J^vul 
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TES ££2! U2 VS*. 

Pi t || lirtr-naftorol nr ^nur Travel \.eri • 


driven car is approximately 
Y3,000 (£6.70) for every hour 
or part of an hour. There are 
about seven major .-car-hire 
firms with branches throughout 
Japan. The cost of hiring; a 
self-drive car depends on the 
size and type of car but is 
between Y11.000 (£25) per day 
(unlimited mileage) for a com- 
pact car (eg, Toyota Corolla) 
and YI4£00 (£32) per day 
(unlimited mileage) for a 
medium-sized saloon (such as 
a Toyota MarfcH or Crests). 

HOTELS 

THERE ARE hotels catering 
for foreign visitors in aU main 
cities. In Tokyo it may be desir- 
able to stay at one of the more 
expensive hotels but the 
cheaper ones are reasonably 
comfortable. The cost of stay- 
ing at a prestige hoter in Tokyo, 
which includes an ordinary 
single room with bath, meals, 
tax and service charge, is likely 
to be about Y15.000 (£33.50) 
per day. Drinks, transport and 
entertainment are other items 
to be considered. Hotel charges 
are subject to -a Iff per cent 
service charge and 10 per cent 
tax. 

Hotel accommodation can be 
booked through -the Japan 
Travel Bureau, No. L 1-cbome, 
MamnoacM. Ctriyoda-ku, Tokyo, 
and at branches in • other 
principal cities, telex ntanber 
J24418 a/b Japan J.. 

Comprehensive details of 
accommodation, including 
addresses, telephone numbers, 
charges and facilities, are in the 
Japan Hotel Guide, available 
from the Japan National 
Tourist .Organisation, 167 
Regent Street, London WIR 
TED. telephone: 01-734 9638. 

In addition to the Western- 
style hotels, there are tradi- 
tional Japanese-style inns 
(Ryokon) in Tokyo. The aver- 
age daily charge for a room 
and two meals (breakfast and 
supper) is rarely less than 
Y10.000 (£22.20). Good 

Japanese inns can be much 
more expensive . than Western- 
type hotels, but a night or two 
in an inn can be an interesting 
and ' pleasant experience. 
Further information can be 
obtained from the Japanese 
National Tourist Organisation! 

Some hotels have facilities 
for small exhibitions or displays 
which business visitors may 
wish to hold. Reservations 
should be made in advance: 

RESTAURANTS 

THERE ARE many hjgb-cJass 
restaurants in the large cities . 
and innumerable smaller ones 
serving American- • and Euro 
pean-styte meals- Drinks cost 
about Y500 - (just over £1) for 
a -bottle of beer \ and' Y700 
(£1.50) for a small . Scotch, 
Others being pro rata. Enter- 
taining in Japan i$ in general 
very expensive, and- particularly 
so. for a good quality Japanese- 
style nwaL 

Business visitors wishing to . 
entertain eoHeagues to lunch 
in a good restaurant or hotel 
may have to spend at least 
Y5.000 (£11) a head without 
wines. (European wines are 
very expensive: locally pro- 
duced wine is much cheaper 
and quite drinkabler) The cost 
increases considerably if a 
private room is used, although 
most parties are held in private 
rooms. 

The cost of a cocktail party 
for .some 50 people in a private 
room, would be from Y400.000 
(close to £1,000) upwards. 
Dinner in a private room would 
cost about Y12,00ff-£l5.000 (£27- 
£33.50) per head at a leading 
hotel. . 


Barbers /hairdressers: A tip 
is expected by barbers in hotels 
but not elsewhere. 

Railway and airport porters: 
YlOO (about 40p) per piece of 
luggage according to size. H in 
doubt porters win usually say 
how much they .expect. 

Narita airport: Y200 near the 
terminal building. Y300 to the 
parking areas. 

Stations: Y250 per piece of 
luggage according to size. If in 
doubt porters will usually say 
how much they expect. 

BUSINESS 

CONTACTS 

Commercial Department 
British Embassy, L, Ichi- 
banebo, Chiyoda-ku, Tokyo 102. 
Telephone (03) 26W51L Telex 
J22755 a/b Prodrome. 

British Consulate-General, 
Hongkong Bank Building, 45. 
Awajimachi, 4-chome, Higashi- 
ku. Osaka 54L Telephone (06) 
231-3355/7. Telex 5225167 a/b 
Briosa. 

The British C hamb er of Com- 
merce' in Japan, PO Box 2145. 
World Import Mart Branch, 
Toshima-kq, Tokyo 107. • Tele- 
phone 031-987 1620. 

Tbe British Chamber of Com- 
merce in Japan, The Kanaai 
Committee: c/o Price Water- 
fa erase Company, Osaka Center 
Butl ding, 68-3, Kata Kyutaro- 
mactri, 4-chome, ’ffigashi-kn, 
Osaka. P.O. Box 526, Osaka 
Higashi. Telephone (06) 252- 
6791. 

THE British Export Market- 
ing Centre is designed both for | 
official export promotions aimed - 
at selected sectors of the 
Japanese economy and to help 
individual British firms or 
groups of companies or their 
agents to make a serious effort 
to improve their export 'per- 
formance in Japan. 

British Export Marketing 
Centre, 7th Floor. World 
Import Mart BmMmg. 1-3. 
Higashi Dcebukuro. 3-cbome, 
Toshima-ku, Tokyo' 170. Tele- 
phone (03) 988-2021. Telex 
J28666 a/b Uktrade. Cable 
address Uktradebeme. 

BUSINESS 

HOURS 

Banks — 

9 am to 3 pm Monday to Friday. 

9 am to noon Saturday. • 
Commercial offices: 

9 am to 5 pm Monday to Friday. 
(While many office* stiB open 
on Saturday mornings, the 
major companies' offices close.) 
Department stores: 

10 am to 6pm. 

(There is no fixed day for the 
weekly holiday; department 
stores usually dose on Wednes- 
day or Thursday .) 

Government departments: 

10 am to 5 pm Monday to 
Friday (Saturday to noon). 
British Embassy; Tokyo: 

9 am to 12.30 pm and 2 pm to 

5.30 pin Monday to Friday 
British Consulate-General, 

Osaka: 

9.30 am to 12^0 pm and 1 pm 
to 5 pm Monday to Friday. 

. TIME CHANGE 
Local time is nine hours ahead 
GMT. 


TIPPING 


TIPPING IS not the custom in 
Japan. 

Hotel and restaurant staff: 
Waiters do not expect tipping 
as service charges and/or taxes 
are added to the bill. Porters 
in hotels patronised by 
foreigners will accept tips but 
do not expect them. 

Taxi drivers: A tip is not 
given. 


TRANSLATION/ 

SECRETARIAL 

SERVICES 

HOTELS in the large cities can 
arrange facilities without much 
difficulty. The larger Japanese 
trading companies usually have 
some competent Englisb-speak- ; 
ing staff. 'The British Export j 
Marketing Centre (address on 
page 3) maintains a pool of ■ 
free-lance interpreters who can 
be booked on a day-to-day basis ‘ 
at a competitive rate. The cur- : 
rent price is Y15 000 per day 1 
within ' Tokyo and Y18 000 per ; 
day outside the city. A booklet 
entitled Secretarial. Interpret- 
ing. Translation and Other 
Marketing Services available to 
British Exporters to Japan is \ 
available from the British 
Overseas Trade Board and gives i 
details of companies in Japan 
and the UK offering these ser- 
vices. 


XV 





If Rome had to be built in a day, 
Nissho Iwai would most lifeely get the job. 


As a leader in global trade, Nissho Iwai 
tackles the tough ones — projects far beyond 
the capacity of any single corporation. 
Although we are first and foremost trade 
specialists, efficiently moving every conceiv- 
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our skills far exceed the limits of trade. 

Nissho Iwai is a project organizer in resource 
and industrial development. We build urban 
infrastructures. Introduce joint venture part- 
ners. Invest in national growth. Finance. 
Inform and advise. 


In fact, little that goes on in this increasingly 
interdependent world does not touch us in 
some way. 

This does not necessarily mean we could 
build Rome in a day ... but we just might be 
best equipped to try. 


NISSHO IWAI 


NISSHO IWAI CORPORATION 

TOKYO HEAD OFFICE 

.4-5, AKASAKA 7-CHOME, MINATO-KU. TOKYO 107 JAPAN 
OSAKA HEAD OFFICE 

30. IMABASHI 3-CHOME. H1GA5HI-KU, OSAKA Sfl JAPAN 


LONDON BRANCH 

Bastion House, 140 London Wall. London EC2Y 5JT. England. Tel.: (01 1628-6030 Telex: 8858B1/4 Cable: NISSHOIWA1 LONDON EC2 


Affiliated offic 


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Tokyo Hoad Office; 6-4, Otemachi 2-chome. Chryoda-ku. Tokyo 100. Japan 
Tel: 243-21 1 1 Telex: J2241 1 

Other Offices and Subsidiaries: New York. Los Angeles, Paris, Amsterdam, London. Frankfurt, Geneva, 

Bahrain, Toronto. S3o Paulo, Sydney, Hong Kong, Singapore 





JAPAN XVI 


Financial Times . Monday July 5 19S2 


Industrial standards perplex foreign companies 


FOR THE last seven years. 
Comes, the British trading 
house in Tokyo, has been hand- 
ling kitchen appliances from 
Bauknecht, part of the expensive 
system kitchens for the top end 
of the market. But the 
appliances are brought in with- 
out electric cords and plugs and 
the fittings are made in Japan. 
The Japanese electrical system 
uses 100 volts and two-pin plugs, 
not 240 volts and three-pin 
plugs as much of the rest of 
the industrialised world. 

• Kodak modifies its slide pro- 
jectors to meet electrical 
safety standards in Japan, 
although the machines are 
accepted for use elsewhere in 
the world. The necessity to 
obtain special government 
safety certificates means that, 
with up to a year's delay for 
the first approval, competitors 
can buy the machine in. the 
U.S., copy it if they wish and 
have it on the market before 
Kodak can sell the original. 

• The Japanese authorities 
maintain a list of the 
ingredients which can be used 
in foodstuffs. If the product 
contains something not on that 
list, the product cannot be 
imported. Trade diplomats are 
not aware of any ingredients 
which have been added to the 
list on the request of a foreign 
supplier. 

• There Is a similar list for 
cosmetics, but it is not pub- 
lished. and those new to the 
market cannot check what are 
acceptable ingredients for a 
cosmetic and those which are 

DDL 

• Last December the Japanese 
authorities published a notice 
setting out specifications, manu- 
facturing and storage standards 
for soft drinks. The standards 
committee of tbe American 
Chamber of Commerce noted 
that February 15 1982 was the 
last date for comments on the 
proposals whose date of 
adoption was “ to be deter- 
mined." The date of adoption 
turned out to be February 16. 

These cases of foreign diffi- 
culties with Japanese industrial 
standards and procedures indi- 
cate why. as one trade diplomat 
put it, “in tbe Western view 
there needs to be more 
harmonisation between Japan 
and the rest of the industrial- 
ised world. In general Japan- 
ese standards are idiosyncratic." 

But the idiosyncraries do not 
necessarily mean discrimina- 
tion, although one importer 
observed that “in some cases 
the Japanese do make a virtue 
of their peculiarity." Still, the 
standards apply to all. Sumi- 


tomo. the Japanese trading 
house, is said to have tried for 
seven years to win approval for 
the sale in Japan of an insecti- 
cide which it sells nearly 
everywhere else. 

The basic problem is not the 
standards themselves but their 
individual iiy. The EEC. in its 
complaint about Japanese trad- 
ing policy before the General 
Agreement on Tariffs and 
Trade io Geneva, claims: 
“Japan has tended to develop 
its own specifications and pro- 
cedures requiring special types 
of construction and/or further 
elaborate testing of goods. 

11 Some types of goods pro- 
duced in accordance with the 
highest world standards are not 
permitted to be .sold in Japan 
unless tests already performed 
satisfactorily in Europe are 
repeated in Japan. Responsi- 
bility for the administration of 
the Japanese acceptance pro- 
cedure if often diffuse and in- 
consistent. so that it is difficult 
for foreign companies to know 
in advance exactly which 
criteria are to be met." 

In essence, that is the case 
against Japan voiced through- 
out the West and the set of 
reasons why standards and 
ihcir place in the panoply of 
non-tariff barriers are held to 
obstruct access to the Japanese 
market. 

Tilt- lack of harmony between 
Japan and world standards has 
been felt acutely by the 
pharmaceutical industry and 
there is the feeling, expressed 
informally, that Japan is using 
its standards procedures at 
least partially to protect the 
domestic industry' until it is 
powerful enough to make big- 
ger inroads into the inter- 
national market 

Industry executives complain 
about the length of time taken 
up by testing procedures, citing 
the necessity for drug stabiiity 
tests of up to three years (with 
which they do not disagree! 
which have to be restarted 
simply because there might be 
a change in the packaging or 
the size of the tablet. 

At different stages in the 
testing procedures, the drugs 
pass through a screening com- 
mittee and an experts commit- 
tee, whose decisions are bind- 
ing. But the applicant company 
has no means of explaining 
why this or that step was taken. 
In contrast to Federal Drug 
Administration -practice in tbe 
U.S.. there are no hearings. 

The experts committee is 
generally composed of 
specialists from the medical 
profession and outside the 


bureaucracy. And this points 
to a wider problem about the 
facilities for testing operated 
by the Japanese Government. 
They a ppea r. a c cording to 
foreign specialists in the area, 
to be inadequate. 

Mr Robert Connelly, the 
American co-chairman of the 
generic programme committee 
at the U^.-Japan Trade Study 
Group, notes that independent 
testing associations often seem 
not to have their own equip- 
ment but know who does — and 
that is often within the 
domestic industry. 

Aerosol cans, be observes. 
have to be tested, but the 
samples go to Tpyo Aerosol 
Kogyo, a division of Toyo Can. 
It is a contract packager, so 
that any product which comes 
in is a competitor. There couid 


be s conflict of interest, he 
says. 

This whole gamut of prob- 
lems is recognised by the 
Japanese authorities and Iasi 
January, in response both to 
foreign pressure and urging 
from within Japan by bodies 
like t the Keidanren. the 
employers federation, the Gov- 
ernment announced a lengthy 
series of measures to ease 
import testing procedures. 

In all. 90 items were 
mentioned and of these 67 were 
the subject of measures for 
improvement. These specific 
measures were accompanied by 
the establishment of a Trade 
Ombudsman, in reality not a 
single person, but a variety of 
offices spread through different 
ministries, with the function of 
inves tig a ting and alleviating 


specific comp! amis. 

The reaction among Japan's 
trading partners was welcoming 
hut cautious. Generally, it was 
recognised that the measures 
might do good but there was 
some doubt as to whether of 
themselves they would be 
enough to improve market 
access markedly and hence 
redress the trade surpluses 
Japan enjoys with the U.S. and 
EEC. At any rate, the Japanese 
Government's action was seen 
as a step In the right direction. 

Bui the specific reactions 
depended on the industry. 
There was approval in the 
pharmaceutical industry for 
relaxations hut a. note of 
cynicism In the motor industry. 

Ley I and Japan, tbe BL joint 
venture importing and sales 
company with Mitsui, noted 


that eight of the 10 measures 
relating to tbe motor industry 
were already in operation and 
hence were scarcely very fresh. 
The special demands of the 
-Japanese system remained 
intact. 


Activated 


These ‘ demands include 
individual Japanese standards 
for heal damage, the evapora- 
tion loss of the fuel system, a 
windscreen washer test carried 
out with Japanese dust and a 
speed warning device activated 
at lQOfcm an hour. 

The main point about the 
December package though was 
probably that it signified 
Japan’s willingness to conciliate 
its trading partners In the 
interests not only of Its own 


export prospects, but also to 
promote harmony in the world 
trading system. 

As a later official statement 
put it: “Japan’s basic posture 
must be to swiftly improve pro- 
cedures wherever possible id 
answer to requests . by other 
countries, including the develop- 
ing nations. In so doing, Japan 
should take into account the 
current state of the inter- 
national economy as well as her 
own status . Jn it. taking the 
broad view that by opening her 
market she will contribute to 
maintaining and strengthening 
the free trade system.’' . 

For foreign- companies, how- 
ever, the crucial point will be 
how the Japanese authorities 
follow through on the formal 
measures. Much will depend on 
the instructions given to the 


bureaucrats— in the past accused 
of 'observing .the rules with 

pedantry— by their political 
masters. But Mr Connelly is 
impressed by the fact that at 
last foreign representatives have 
started to be invited to sit on 
the conwrittees drawing i*:* 
industrial standards. The out- 
side voice is being beard. 

Yet, perhaps- not surprisingly, 
there is a different voice and it 
comes from companies. who bav* 
already invested their time and 
effort in establishing a place in 
the Japanese market. “ Having 
gone into the trial of getting 
over the barriers," said one 
chemical company executive. 
“ Tm not interested in seeing 
. every Tom, Dick and Harry 
coming in at a cheaper cost/' 


Paul Cheeseright 


Production in Japan may be key to success 


TO MANUFACTURE in Japan 
may be the key to success there, 
whether jc is through joint 
venture, wholly-owned sub- 
sidiaries or contracting work 
out. Foreign businessmen stress 
that getting in and staying in 
the Japanese market takes 
commitment, and part of that 
commitment is having a 
physical presence in Japan and. 
best of all. a manufacturing 
presence. 

By April 3980 foreign com- 
panies held 25 per cent or more 
of the equity of 2.300 companies 
in Japan, according to the 
Ministry of International Trade 
and Industry (Miti). 

Americans have made the 
greatest share of total invest- 
ment as well as tbe major pan 
of manufacturing investment. 
In Mill’s survey of foreign- 
affiliated companies more than 
half of the 1.315 it questioned 
were American affiliates. 
German-affiliated companies 
accounted for the nest largest 
group with 7.6 per cent. 
Altogether, European-affiliated 
companies totalled 32.5 per cent 
of the companies surveyed. 

Why have companies chosen 
to manufacture in Japan rather 
than export their goods there ? 
For American companies, 
barriers at home rather than 
barriers in Japan have 
encouraged them to go there, 
says Mr Keith Knowles, 
planning director of Mobil 
Sekiyu. He is a member of the 
U.S.Japan trade study group 


now looking at American manu- 
facturing investment in Japan 
to find out why companies come 
and how they have succeeded. 
The report will be published in 
mid-July. 

“They simply couldn’t get 
enough attention from the 
manufacturing base at home to 
the needs of the Japanese 
customer." Mr Knowles says. 
Companies reared on America’s 
huge domestic market found 
meeting Japanese specifications 
too bothersome. 

Other companies saw manu- 
facturing in Japan as a way of 
countering present or future 
competition from Japanese 
rivals. The results have been 
encouraging. Companies which 
set up here have generally 
succeeded, Mr Kflowles says. 


INDICES 


OF PRODUCTION 

(1*75=100) 



Electric 

Chemical ■ 

Oil-coal 



machinery 

products 

products 

Textiles 

1970 

87J 

86£ 

79.8 

1Q5JI 

1976 

1283 

11L5 

102.7 

108j4 

1977 

1363. 

117.2 

104.7 

“ 106.7 

1778 

155.2 

131.3 

104A 

107.7 

1979 

177.2 

143.1 

1065 

1085 

1978 

213.0 

144.7 

1012 

107.1 

1961 

246.0 

144.9 

95.4 

105-3 


Source: MITI 


Strategy 


The American Chamber of 
Commerce took a dose look at 
American manufacturing invest- 
ment in a study published in 
1979 and came to several 
interesting conclusions. 

It said that not only is manu- 
facturing investment in Japan 
an essential part of business 
strategy but it is also profitable. 
Return on investment from 
Japan was higher than that of 
U.S.-affiliated companies in 
other countries. 

The report noted that making 
products in Japan does not 
threaten manufacturers at home 
or damage their export pros- 


pects. In fact, manufacturing in 
Japan appears to have spin-off 
benefits for American exporters 
by bringing in foreign-made 
components and giving com- 
panies a chance to seU other 
products in Japan. 

The European experience 
appears to mirror that of its 
American counterparts. A study 
sponsored by the European 
community on European invest- 
ment in Japan is due to be 
published in August 

Just' how companies have 
invested has varied. Some set 
up manufacturing facilities 
immediately, others developed a 
market before investing in 
manufacturing. 

Mobil Sekiyu, a wholly-owned 
subsidiary of Mobil Oil. has 
been in Japan since 1893 and 
has become part of the Japan- 
ese petroleum industry. It 
imports crude oil which it sells 
to two joint venture manufac- 


ture companies and then buys 
back the products. 

Levi Strauss, tbe jeans maker, 
decided to import about 25 per 
cent of the goods it sells in 
Japan from the 40 per cent 
from factories in other coun- 
tries and produce the balance 
in Japan by contracting the 
work out Most other clothing 
makers avoid the headaches of 
producing in Japan by licensing 
its name to a Japanese maker. 
However, Levi Strauss wanted 
to retain control of its most 
important asset — 'its brand 
name. 

“That isn’t to say that the 
Japanese company which has 
the licence doesn’t do a good 
job,” says Mr John Frechette, 
general manager of Levi Strauss 
FE Japan „ “ Sometimes they 
have better success in building 
a brand in Japan than makers 
have in their own country.” 

The door to the Japanese 


market has opened little by 
little. Foreign companies have 
been in Japan for many years 
but not in any real force until 
the postwar years and .parti- 
cularly after Japan’s entry to 
the OECD - in 1964 which 
marked the beginning of a 
liberalisation process which stiH 
continues. 

Until 1973, the number of 
shares a foreigner could buy 
in a Japanese company was 
limited. Until 1980 foreign in- 
vestment was “prohibited in 
principle” rather than “per- 
mitted in principle.” . 

Japan has never offered in- 
centives to foreign, investors, 
nor has it taken investment 
missions abroad to attract for- 
eign capital. 

Recently, (he ACC took the 
initiative in looking at different 
places in Japan to study the 
possibility of locating plants 
til ere. They looked at the avail- 
able labour force, water re- 
sources, land prices and en- 
vironmental problems.. Yoko- 
hama rated top of the list and 
the Tohoku region bottom. 

There has . been no regular 
trend in the yearly increase of 
foreign-affiliated companies. 
Numbers peaked around fiscal 
1973 and then dropped sub- 
stantially between 1974 and 
1977, reflecting the • depressed 
Japanese business climate fol- 
lowing the first oil shock. In 
fiscal 1978 newly-established 
foreign affiliates totalled 179 


and the next year tbe figure 
fell to 148. 

What is evident in the sur- 
vey is the widening gap between 
the number of these companies 
in commercial and manufac- 
turing sectors. By 1980 fewer 
foreign-affiliated companies 
were in manufacturing — £2.S~ 
per cent — than in commerce — ’ 
44J per cent. (In the manufac- 
hiring sector chemical and 
machinery manufacture attrac- 
ted the biggest numbers). 

While part of the reason may 
be the recent opening of 
Japan's financial markets to 
outsiders, the country’s sluggish 
domestic economy as well as 
surplus capacity in basic indus- 
tries -world-wide, high interest 
rates and volatile foreign ex- 
change rates are blamed for 
damping the enthusiasm of for- 
eign manufacturers who might 
invest 

Tbe future picture does n^' 
seem bright Mobil's Keith 
Knowles says there is not much 
opportunity for new foreign 
manufacturing . companies to . 
come to Japan. “A lot of the ; 
opportunities relate to com- 
panies which are already here 
but not as fully as they should . 
be.” he says, 

“Any high-tech no kigy indus- 
try Should be here. This is. 
where the competition is go- 
ing to be and they should be 
here dose to these companies ; 
to watch what they are doing.” 


Julia Elcock 



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He’ll begin by telling you he first came to Japan in ’64, when 
you could buy a cup of coffee for pennies. (You have to pay a pound 
or more today.) 

Now he's joint MD. he makes at least two Tokyo trips every 
year, so he knows the Japanese business scene better than most 

He'll tell you that Toshiba was making domestic electric 
lamps as long ago as 1390, that a letter from Thomas Edison was 
an honoured place In the company museum, and that Toshiba was 
in at the start of the electric appliance and home entertainment 
industries. 

On the heavy engineering side, he’ll tel! you that the 
company’s history is equally illustrious. The early lead in communi- 
cations (going back to telegraph apparatus in 1875) has been 
maintained. It now extends from railways — the motor and central 
controls for Japan's famous Bullet irain and an experimental 500k?h 
magnetic-track train — to space satellites and office automation. 

How does he know so much about us? Our two firms have 
been doing business together since the Sixties. And he's found that 
Toshiba still pays more attention to i he production line than the 
bottom line, even though we're new a £4.2 thousand millions* 
multinational operating in over 120 countries, with over 1,600 people 
in our Research & Development centre alone, -ei 











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CONSUMER ELECTRONICS AND APPLIANCES 
TVfVTR — "Vs S: ;;". Vsrscftr:m«>i. V7R.;. Tv 
Ca.-* ii . zzz ";rf ; Audis Equipment — 

Zez-z Ma-n-sr-i 

Cas:-:::; ~zziz. — --:s, CartrrtTe:. 

Home App:.a“ses — V ;r;*3.e. Owens. 

'.'.ss'e-s i-r O-.-vz Pczc Pizcczzz^. 

C:“se 3 e*cc ;:r p 5. A>- Cciwmo— . 

Ugh!::-- App.ia-xass — Kec Bo-. ‘ Cct?-:: 

FVr.-es z s. :-zc~3nz c*: Ls*»?o 

on- Aui ar, 

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HEAVY ELECTRICAL APPARATUS 
Nuclear Equipment — Nuclear Turbines and Gener- 
al;.-! Ccnwes Temperature Fusion Reactors, 

F3s: B’?wr Reactors. Power Equipment — 
T-^-TTT.v-e'ectr-c Ger?e'3tiry; Equipments. 

Tra- srr,-ss c-^a".d T-arsfcrmaticn Systems. Steam 
"j-q.rci a.-i Cenerjiorc. Transportation Equipment 
— AC .ir-a DC E:?c:*i: Lcccmctives. Automatic 
T i— . Ccri-c: E-3Uic«r.e-«js. Lifts, Escalators. Indus- 
tr.ai Equipment — Vote's. Vacuum Circuit 
E'?i-.c's. ovsrems for industrial 

inCuslriai Measuring Instruments — A-r 


FvVj:*;i Vc-VS'.pq S- stems. X--ay cr Gamma-ray 
T-i;- od’-sss. E'ectrcndsngiic FlGrttneie.'s. 


1 very amJI Buainesa Compuif T20Q 

INDUSTRIAL ELECTRONICS PRODUCTS 
Electronic Computers end Office Equipment — 
Computers. Calculators. Facsimiles, Copying 
Machines, Wort Processors. Labour-Savtng 
Equipment — Mall Processing Machines. Bank 
Noie Processing Machines, Automatic Ticket 
Inspection Equipments. Broadcast and Canumafi. •' 
cation Equipment — RadlorTV Broadcast Equip- 
ments, Satellite Communication Equipments, -• , 

Navigation Aids Equipments, Air Cargo Terminal 
Systems. CATVs. Medkot Eqiapment — Diagnostic- 
X-ray Equipments. Diagnostic Ultrasound Equip- . 
menls. Teietherapy Equipments, Hospital 
Automation Systems. 


6JKB»teULStHAM 

BJsCTRONlC COMPONENTS “ 

ICs (fotegreted Circuits), LSI* (Large Scale 
Megmted Cfrcuffs).— 16K bit and B4K bit CMOS 
static RAMS, 64Kbd dynamic RAMs. CCD fCharge 
Coupled Devices). Discrete Semiconductors — i fh 
(Light Emminfl'Dtobe), Thyrislors.TransblQrs, 

Dl odea; Bectron Tubes — Colour Picture ^ Tubes, 
Magnetrons , CRT Displays, Laser Tubes. LCDs 

WquMQysaJ Display): Optical Communication 
Devices. . .. 


In Touch with Tomorrow 


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Max Wilkinsoil, Economics Correspondent;, interviews the Chancellor of the Exchequer, Sir Geoffrey Howe 


Geoffrey S^was^armW W* Ssmty ar as 

Now. after the fitean«r Jim CaHa«- 

nosedive since tS wife toe «?* *£ 

^evelW^ Sd jS* * 

libation hasAeen cut from over • f n 

20 per cent to single figures between ius 

But the (SanceH^ strategy ??!? SSir*- ^ ?“■ coding 
stat faces perhaps i4 severe? af tfae , Fai l dai ^ cm*. things 
test: can itdeftver toe^low **■ eoing; quieter Sir 

interest rates wWch he belief !S? at 5^ wa l 

wffl he the means of lifting the <XS0D ^ft m * T from 12 

economy dear of reces&km and ™ *** 

wiU growth he fast enough to ^ ^^et itself 

convince the electorate ilblt un^ ^2 
cmptoyroeot wiE ai last' stop _ * “S 21 

nang^ ..- ■ uopt^mtority caused by. his 

The" arwmployment" figures increase ® the tes burden a 

above aSIwfH be used to judge 5*^,* 

the results of wtert many S^LS^ZSSS^S. ^ 

have dubbed an “experiment ia 111 * * 

monetarism." patriotism. The pound -was 

But for Sir Geoffrey himself Sf 1 ^ 

the word monetarism strides' a of*?h R - 

jarring chord. “ I don't believe SSSt^ntewS St'S* >£35 
m ‘isms V he says and adds: . Sfto ^ 

“•iswe ’ a ~» (..hi... ■» rr_ j siarc ix> ease. 


fe still the enemy 


in isms V he says and adds: 
“ ‘ Isms ’ are fashions.” He des- 
cribes economics as w such, an 


■ -More recently, however. 


uncertain science ” and prefers ^ ^ ^? 0ere ^ -***» and 

jto see his ideas as an essentially baw cast a 

_. commons ease reaction to past “ eef>ers “ a ^ ,iW over the worlds 
: . a failures. -Par from being an- tJ ^L_ f u ^ m - 

■:J “ experiment,” he believes rS***?*' * , to _ jncjudtag 
b British monetary policy has sc hool leavM^ has c onttn a^i To 
,V now received the good house-- y ars ^’* r,d . as y€t * r ® 

—■ keeping seal of approval from ^ any su fetano al 

$' ““r? the " iiduSU581 S^eS^SSr^S 

£ “if you talk to people' *** 5*^ f t u by 0.4 

other countries, many of them £?i£ elrt lflSt 

I."' will say: ‘Gosh, you needed to qixarte ^. °* 1381, aod is now 
k do wbat you are doing. We *““ e *&* <* nt tower «»“ 
. ' have great admiration not only ™f n .™ Govemmeot . took 


for the fact that you decided- 
to do it, but that you have 


office. 

. How then does- the Chancellor 



decided to do' if with such wide- bams elf see . the balance sheet 
spread acceptance from the ^er three years of office and 


Ashley Ashwood 

■ Sir Geoffrey: “ One gets some marks for consistency “ 


political system,’ " he says. 


with only one more Budget be- 


“I think there has been, an tore the next election? What _are 
increasing tendency to recog- toe criteria by which he thinks 
nise the need to curb the' run- toe strategy shou ld be judged? 
away pattern of inflation and Be starts from toe Govern-- 
public sector deficits — one h a s m £ n t*s campaign to change 
seen country after country in psopte’s fundamental attitudes 
difficulties which in the end to toe economy, to work and to 
have to be checked by vety. bargaining, 
very severe means. This has “I think we have established 
been the pattern whether it has the need for a sharp transforma- 
been in Turkey, Ghana, Poland. Idon in our economic perform- 
Italy or Belgium or anywhere ance which would depend on 

else. . people as weD as on govern- 

“The interesting thing has memt,” he says. He also rites 
been the diminution of the tour ways in which the policies 

belief that there exists a kind, have “ begun to extend the 

of more cheerful alternative if areas of economic vitality 'fund- 
we attach less importance to amenta! to economic growth" 


the battle against inflation." 


“We have done that by sub- 


At his desk, looking sideways stantial deregulation, by signi- 
onto the garden behind ficant changes in the tax system. 
Number 11 Downing Street. Sir by sgnificant but not yet slif- 
Geofeey, aged 55, speaks with firient changes jn the dominance 
toe practised rapidity of a and inertia eff toe public sector. 


successful former barrister. 


and I think we have demon- 


pink rose in bis buttonhole strated our' determination to 




achieve a sharp and sustainable 
reduction in inflation.” 

The debit 'side, which has pro- 
voked the fiercest criticism of. 
toe Government, he deals with 
rather blandly. After discussing 
toe changes in attitudes and bet- 
ter realism, he says: “ It has not 
yet led to .a tuznnmnd in the 
tide- of unemployment and it is 
leading inevitably only to a slow 
rate of growth- in a worid -where 
others are scarcely growing at 
all.” 

Sir Geoffrey’s more detailed 
ideas ^out how toe forces of 
competition could be streng- 
thened and the problems of un- 
employment were a central part 
of 2ns review of Conservative 
policies which fie made at toe 
party’s political centre summer 
school in Cambridge this week- 
end. 

Sir Geoffrey is one of those 
politicians who prefers toe 
steady drip of reason to any 


attempt at storming public 
opinion with rhetoric. He never 
shuns a qualifying clause and 
be likes to invent aphorisms for 
the key points jm his strategy. 

His latest is an oft-repeated 
defence agaanst’toe charge that 
his monetary squeeze has made 
unemployment tor wozse than 
was necessary. “A rise in 
unemployment is not toe bill 
we pay for reducing inflation 
now. It is toe bill we pay for 
having allowed it to continue, so 
long in toe past,” he says. 

Sir Geoffrey’s own summary 
of his strategy conceals a 
number of bold and quite 
radical decisions which he has 
taken as Chancellor. One of 
these was the substantial shift 
from, income-tax to Value 
Added Tax in his 1979 Budget 
This move was later condemned 
even by some of his supporters 
because it added four points to 
toe annual rate of inflation just 


mm 

g- j 


Letters to the Editor 


Danger of putting a generation at risk 


~n 

. _ r. • 

.-"rs 


From the Chairman of 
United Biscuits. . . 

Sir . — J agree with toe com- 
ments in your leader on June 
24 that while “ there is no short- 
term panacea ” for high unem- 
ployment, “tiie -case for 
short-term palliatives should 
not be ignored.” 

While unemployment Is 
essentially a long-term problem 
(it has been on a rising trend 
in Britain for over twenty 
years) we have an abnormal 
bulge in the short-term, because 
of the recent massive shake-out 
of people from industry. The 
introduction of micro-process- 
ing technology is likely further 
to reduce toe number of jobs 
in manufacturing industry, 
and there is bound to be a 
time lag before the greater 
wealth which, must result from 


Britain’s greatest 


From Mr E. H. Thomas 
Sir,— Mr D*. Cobbotd (June 26) 

’ describes the. Channel as ** that 
tiresome strip of water"- No 
doubt Napoleon and Hiller., 
would have agreed with him 
wholeheartedly. The Channel 
is, and always toll, be, .our 
greatest ally, and if is unfortu-- 
.nale that it is not possible 1 to 
widen toe Cflraimel. 

.. . However, the tiresome discus- 
sions of tunnels and bridges 
/have draCSed on for over a cen- 
tury, with certain notable gaps, 
and hopefully win eontinue to 
fill your - ■ correspondence 
columns indefinitely. - ■ 

E. H. Thomas. ... 

"O, Branr aster Lane, . 

Parley, Surrey 


improved productivity filters 
through to create new jobs in 
toe service sector. 

. We therefore need an interim 
measure to tide us over toe 
hump, and I would like to sug- 
gest that thought should be 
given to having a once-and-for- 
all, “special offer,” voluntary, 
e ariy-re tirem ent package lor up 
to one million people within 
sight of retirement and below a 
defined pay level. 

All sectors of society could 
contribute: the Government by 
reducing toe pensionable age 
for those who volunteered to 
retire, companies ( share- 
holders) by making the neces- 
sary injection of funds into 
their pension schemes, and 
unions by relinquishing the 
“rate for the job,” which is a 
disincentive to toe employment 


of the young and inexperienced. 
. All this would, of course be 
costly but less expensive than 
a generation of young people 
who are unable to find work for 
years, and toe bitterness and 
anti-social attitudes which that 
would engender. The nation 
cannot .afford to risk- having a 
generation of young people 
losing-the will to ‘work, or being 
“used” by extremist "crusaders” 
whether of toe far .left or the 
far right. 

It would be a ; terrible indict- 
ment of our generation if a cry 
of “remember the 80s” were to 
poison industrial relations in 
future decades as the memory 
of the SOs - has damaged 
relationships to this day. 

(Sir) Hector Laing. 

Syon Lane, Isleibortit, 

Middlesex 


by encouraging women to be 
interested, in business struc- 
tures and success in the fields 
yoir cover. 

We should remember that the 
- over-supply . of labour has 
occurred simultaneously with an 
under-fufitied quota of 
imagination, nerve and pro- 
fessionalism in both board- 
rooms aud government. May 
I then suggest that toe FT 
‘ notices that the wrong people 
have been making decisions for 
too long. 

Elizabetn Crosbie. 

86 Longmevdow, 

Tarriano iLoertue, NW5„ 


Women and 
employment 

From Miss Elizabeth Crosbie 
’ Sir.— May .1 respond to Ian - 
Ilarareaves’ statements on the 
"highly rational and balanced 
response" to “female emanci- 
pation” by suggesting that the 
Financial Times incorporates 
such a stance within its pink 
pages. The headline "Women 
and immigrants — a blurred 
picture” juxta positioned by 
"Men and Matters" was 
unnecessarily tactless. 

The consequences of accept- 
ing women’s equality can not 
be parcelled neatly Into * Social 
Affairs" or similar categories, 
the margin includes the media 
and language itself together 
with such modem afflictions as 
the divorce boom. Would that 
the FT acknowledged .its 
female readers hot by creating 
a woman's page ghetto, rather 


A victory for • -■ 
common sense 

From Mr G. A. Davies 
Sir, — Your headline. “Vic- 
tory for British Rail" (June 
29) does little to stimulate 
good industrial relations, rather 
toe opposite, perpetua ti ng toe 
“ them and us ” attitudes which 
bedevil UK industry. ' 

' Given the chaos imposed on 
toe public in recent days, there 
is little justification for praise 
of either side. The oniy victory 
has been for the common sense 
of toe average working man 
faced with the failure of leader- 
ship by both management and 
unions. 

G. A. Davies. 

GreenhiUs. 

West Mount Avenue, 

Amcrsharn, Bttcfcinpha«w/iire. 


Bade to the 
gold standard 

From Mr Patrick Collins 
Sir.— In his letter of 30th 
June Mr Mackay refers ro the 
recent article by Anthony Harris 


concerning the inadequacy of 
.the present monetary system, 
and advocates a return to toe 
gold standard. Despite its 
weaknesses the system of guar- 
anteeing convertibility . of cur- 
rency into gold performed an 
essential function for which no 
other arrangement has so tor 
been able to substitute' in a 
democracy: it provided an 
impartial mechanism ..which toe 
general public accepted as justi- 
fication. for .the"- monetary 
discipline necessary to prevent 
accelerating inflation. '• 

For a number of reasons the 
resumption of currency con- 
vertibility based uni gold would 
hot be desirable today, and 
indeed no single commodity 
could provide .as adequately 
stable basis for such a system. 
.The only means, of .-resuming 
currency convertibility today is 
by linking the value of money 
to a range • of ; durable, basic, 
essential commodities — a prin- 
ciple tbat has been' supported 
for more than a century by 
some of . the ■ most eminent 
economists of the day. How- 
ever, the specification of such 
a system is complicated by the 
need for commodity prices to 
respond to market forces, and 
it would be neither economic- 
ally sound nor desirable to 
attempt to fix primary com- . 
modity prices, as the' .price of 
gold was fixed under the gold 
standard. 

This problem was definitely 
solved in the 1940s by the 
Australian economist, Leo St 
Clare Grondona, who devised a 
system for toe implementation 
of a conditional primary com- 
modity standard, which remains 
ihe oply practical means of 
returning to currency conver- 
tibility.' In fhe irinre. than 30 
years since it was formulated 


this system has been praised by 
numerous economists, business- 
men and parliamentarians, and 
in most of the serious press 
(including the Financial 
Times). During that time no- 
one, in either the economics 
profession, . business, govern- 
ment or the civil service, has 
produced any reason for doubt- 
ing that the functioning of the 
system would, without risk, and 
at. negligible cost to the coun-., 
try, have extensive economic 
benefits, including stabilising 
the real value of sterling, the 
balance of payments, the terms 
of trade, toe level- of economic 
activity and the exchange rate, 
and acting in a number of ways 
to reduce inflation! 

Unfortunately, during toe 
post-war period of ascendancy 
of discretionary economic and 
monetary policies, governments 
and their advisers have 
apparently had little interest in 
a system that would Jay the 
foundation for a non-inflationary 
monetary policy, improve toe 
operation of free markets, and 
reduce the need for active 
government intervention in the 
economy. 

If the present government 
genuinely wish to re-establish 
“sound, honest and honourable 
money” as toe Prime Minister 
claims, there is no alternative 
policy - initiative which would 
contribute more to achieving 
this objective than toe re-estab- 
lishment of currency convert- 
ibility according' to the 
Grondona system. 

Patrick Collins. 

Department of Management 
Science, Imperial College, 
Exhibition Rood, SWT. 


Computers for 
General Practice 

From Mr William McMiUan 

Sir,— -An unexplained move 
by the Government, to give two 
computer firms a huge subsidy 
on their sales of microcom- 
puters for general practitioners’ 
surgeries, seems likely to drrve 
all toe other firms pioneering 
this field out of business. 

Not only does this action 
conflict with the Government’s 
declared aim of encouraging 
innovation and competition — in 
its own Information Technology 
Year — but there are other 
disturbing aspects. 

At least one of the non- 
fa voured firms has recently 
received a substantial “small 
firms ” aid gram from toe same 
government ■ department that 
now threatens its .extinction ! 

The ink will still be wet on 
the taxpayers* cheque as it 
enters the receiver’s incinerator, 
w. McMillan. 

Berra ld Court, Westfield Road, 
Edgbaston, Birmingham, 


• as the economy was entering a 
deep recession with sharply 
rising prices. 

However he shows - the 
opposite of repentence: “The 
reaction to my 1979 Budget was 
powerful, positive and correct. 
The key component was a 
dramatic reduction in direct 
taxes and above all, what I call 
the Albanian rates . of tax on 
higher . levels. I. think toe 
changes enabled us to rejoin 
the human race, In terms of 
incentives. . Within a few 
weeks I remember the aircrew 
of a .British" Airways- plane 
saying: Thank God you have 
done that; it really does signal 
a change in performance.’ Then 
driving down to my constitu- 
ency I was stopped by a group 
of chaps on the roadside who 
said ’Good on you. Well done.’ 

“ In film terms, they felt the 
U.S. cavalry had arrived. In 
the 1980 and 1981 Budgets we 
- really had to keep our heads 
down and get stuck into some 
very difficult and tough 
decisions, and we wouldn’t have 
expected people to be dancing 
in fhe Streets after the 1981 
budget.” 

He also showed considerable 
resolution by deciding to go for 
a much more restrictive Budget 
in 19S1 than most people includ- 
ing some Conservative ministers 
had expected • There was 
alarm among the wets that this 
would choke off economic re- 
covery. and it provoked a cele- 
brated letter to the Times from 
364 university economists 
' deploring his policies. 

Was he at all shocked to find 
so many distinguished people 
ganging up against him? 

“ I was shocked that any 
economist had that much time 
to collect 'signatures to a letter 
of such breath-taking super- 
ficiality. It stressed in a sense 
that our departure from the 
conventioned wisdom of old 
fashioned Keynesianism hadn’t, 
been recognised as such. It 
didn’t make me really examine 
the basis of our thinking, 
because that was not founded 
on the simple purchase of an 
economic doctrine. ... It had 
evolved over a long period of 
tTying to balance all the 
arguments." 

However, he says he is 
sympathetic to those industria- 
lists who have urged that a 
framework of monetary disci- 
pline should be. combined with 
some increase in demand to 
give "a sign of hope and a sign 
of awareness of the problems 
that industry is facing.” 

But he says: “I am still re- 


luctant to let anyone believe 
that toe key to economic salva- 
tion comes from a little more 
enlargement of the amount of 
demand. It would be so in- 
significant. If one were to 

enlarge demand by l per cent, 
the impact' on any individual 
corporation would be so 

limited." 

So which are the attacks on 

his policies which hare bit 

home? Sir Geoffrey does not 

hesitate: " The ones that have 
caused most anxiety are those 
that have been concerned, as 
we have been concerned, with 
toe overshoot -of monetary tar- 
gets accompanied by the 
criticism of undue monetary 
severity." 

• Although, as Sir Geoffrey 
observes, these criticisms can- 
cel out in one sense, they also 
point up the failure of the 
Governments hopes chat it 
could quite easily 'limit the 
money supply and that this 
would rapidly reduce people's 
expectations about inflation. 

It would be easier and better. 
Sir Geoffrey says, if it were 

possible, in the UK to operate 
in terms of -a single monetary 
target as the Germans do. “but 
that seems to be a very difficult 
thing to achieve in an economy 
that is emerging from a high in- 
flation .and from a number of 
institutional changes." 

But isn't all this a lot more 
diffuse than* the old idea of a 
direct link between monetary 
targets and -inflation? 

Sir Geoffrey says: “ It may be 
that one was naive to think that 
under the old concept if one 
enunciated a growth rate for 
the money supply every wage 
bargainer would rush round and 
look at it aod determine his 
pay by reference to it.” 

As for the future:..it is clear 
that Sir Geoffrey does not see 
the fight against inflation as 
something that can quickly end 
in an armistice. 

And this will clearly require 
continuous persuasiveness. Sir 
Geoffrey - says he has been 
preaching the “essentially non 
partisan” message about infla- 
tion since long before he came 
to office. ■ 

He said: “People do some- 
times say to me, well you have 
been saying it rather a long 
time and it looks as though you 
were right after all. So one gets 
some marks for consistency.” 


Lombard 


Industrial mood 
deteriorates 


By Samuel Brittan 


NOW THAT the veil of the 
Falklands has been lifted, a 
clearer view can be obtained 
of some changes in the British 
economy since the March 
Budget In a sentence, the pros- 
pects for inflation have im- 
proved while those for output 
and employment have 
deteriorated. . 

Let us. in true British 
fashion, get toe good news out 
of toe way first. The Budget 
“ Red Book ” foresaw a fall to 
9 per rent in inflation by the 
end of 1982. 

The Bank of England 
Bulletin, which is far from 
being an automatic cheer- 
leader for the Government, now 
suggests that this target may 
be reached sooner and lha( a 
rate of “7 or S per cent or 
perhaps lower ” could be 
reached “ in toe course of the 
coining year ” — an ambiguous 
expression which may refer 
either to toe whole of 1983 or 
to the next 12 months starting 
from now. 

But on the immediate outlook 
at least the Bank is likely to 
be right as most of the forces 
determining toe 3982 inflation 
rate are already in the pipeline. 

Circumstantial 

The evidence for lower out- 
put growth is more circumstan- 
tial, but just as strong. Industry 
has passed through three phases 
so faT this year. In toe early 
months the mood was more 
pessimistic, as output hesitated 
once more, partly under the 
influence of severe weather, 
after the modest recovery of 
latelfl&I. 

Then in the early spring 
there was a more optimistic 
pbase which coincided with the 
Budget when Treasury forecasts 
were revised upwards to show 
a real GDP growth of 11 per 
cent in 1982 — both year on 
year and end-year on end-year. 

Now there is a ihird phase of 
renewed pessimism. The clear- 
est evidence is the trend of toe 
CBI survey for expected output 
in the next four months. For 
nearly a year up to April there 
had been a small positive 
balance of respondents expect- 
ing an increase. 

But in May toe balance 
changed to minus 2 and in June 
to minus 4. Preliminary evi- 


dence suggests a further de- 
terioration in July. 

These balances are too small 
in suggest anything very 
dramatic. But toe trend is the 
wron^ way and there is some 
qualitative e\idcnee of a bearish 
load. Some companies are re- 
ported to be wondering if the} 
have built up their stocks ex- 
cessively; and a fresh wave of 
destocking and manpower redue 
tion may be occurring — not on 
toe scale of i9So-.Si. bur enough 
to turn modest recovery into a 
renewed unemployment' crisis. 


Forecast 


The Treasury is. now believed 
to have reduced its 19S2 grow th 
forecasts from 1 i per cent tn ;he 
1 per cent earlier envisaged by 
the CBL while the CBI itself is 
likely to gn down further, per- 
haps tn half a per cent. 

It is not. of course, toe exact 
□umbers which matter, but the 
fact of the likely range lias 
shifted downwards. 

The Americans used to have 
an expression “ growth reces- 
sion" for a growth rate which 
was positive but loo low to pre- 
vent unemployment and slack 
from increasing. 

This is whnl the UK now has. 
Even before the latest un- 
favourable indicators, unemploy- 
ment was risme by nearly 
20.0UU a month: and in June it 
rose by nearly 4U.000. 


Policy 


It will nm be easy to device 
an appropriate policy. The in- 
dustrial relations lobby among 
employers is already moaning 
that it will be difficult to nego- 
tiate a third winter of pay .re- 
straints and it fears that settle- 
ments are more likely to rise 
above than fall below toe 
present 7 per cent average. 

Any demand stimulus which 
encouraged these sentiments 
and gave negotiators the impres- 
sion that a higher level of settle- 
ments could be financed would 
do more harm than good. For 
any stimulus lo nominal demand 
would be more than eroded by 
higher wages and prices; and 
real demand could actually fall. 

The policy problems will be 
further explored in this week's 
economic viewpoint. 


afford to let the 

got 



cant 

hts 


1 : Wtt 

* V ry v, •: • ;• -J7 ■ . . : . ~ 


' % ' 



,il Mr- 


> * '■ 

* : " • * " - ••••.— ■ 




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!■. 


14 


CfiBpanies and Markets 


Financial Times Monday July 5 19S2 


UK COMPANY NEWS 


Atlantis Resources valued at £9m 


W CARLA RAPOPORT 

Atlantis Resources Interna- 
tionaL a Calgary-based, oil and 
gas company, publishes its 
prospectus today in preparation 
for a full stock exchange listing. 

The company's listing follows 
a placing last week of 3m of 
Atlantis’ shares at 45p each, or 
15 per cent of the company’s 
equity. The placing raised £1 35m 
and capitalises the companv a t 
£9m_ 

Atlantis was formed t&ree 
year® a |° by Mr Lawrence Payne 
40^a Canadian with some 18 
years ■ experience in the mi 
business. The company is 
primarily engaged in identifying 
<rtl and gas prospects through its 
owm geological research and 
rammg joint venture capita] in 
order to develop those prospects. 
Since April, 1979. the companv 
has raised C$31m in Canada and 
the UK and has participated in 
ejspwation projects in western 
Canada and Illinois and 
Jjomsaana rn the U.S. 

Atlantis Resources, as operator 
Mr the joint ventures, controls 
■the drilling operations of the 
proj ects and as a result, earns 
a working interest of up to 25 
per cent of the joint venture’s 
stake in each project. As of 
December 31. 1981, the proved 
reserves of the oil and gas 
interests whjrfi Atlantis earned 
in this manner had a net cash 
flow worth CS17m over the next 
35 to 20 years, discounted at a 
15 per cent rate. Probable 
reserves amounted to C$5. 9m 
discounted art 15 per cent 

Visiting London last week. 
Mr Payne, now president of 
Atlantis, agreed that the timing 
of the listing was somewhat 
unfortunate as the state of the 
oH sector is now quite weak. 
But he said that the conqmny 
had been working on a public 


BOARD MEETINGS 


T he ft* jow]r -3 companies have nou- 
ned B aas of board •meetings M riio 
“““ Exchange. Such meetings am 
osiully held for the purpose of Con- 
*»derrfig dividends. Official .ndreauong 
avadsble as id whether the 
Cl VI den ds an interims or fintfls and 
me sub -divisions shown below are 
based mainly on lest year’s tunc table. 

TODAY 

Interim: — SG8. . 

nmter-AtMMUd Leisure. BUming- 
ham Mint. LHC International. London 
Pavilmo. May end HusseM. ParitdeJe. 

Alexander Rusaett. Seksrs 
IWemetionri. Textured Jersey, Whewoy 
Watson . 


FUTURE DATES 

Cenfctf Property Ju T y 13 

Renting Mercantile Invest Tsr Aug 70 

General Cnrraldtd. invest Tsi July 14 

Grenada - .... July 6 

Imperial Grouo July 8 

Ladies Pride July 22 

M end G Duel Trust July 14 

Midland Bank July 20 

R nafs;— 

Barleys o» YoiVshire July 13 

Booth (John) (Bolton) July 8 

Peerless - July 12 

Rothmans International July 2D 

Thorn BUI July IS 

Watson (R. Kelvin! July S 


listing for IS mouths and was 
reluctant to delay the move 
further. Atlantis hid previously 
purchased a controlling interest 
in Le Vollonet, a publicly-quoted, 
dormant Jersey-based company, 
with the 1 mention of “reversing'’ 
into it for fts quotation. Ihat 
schema was abandoned in favour 
of a direct placing and full 
listing. Following next week's 
market debut. Atlantis will offer 
its own shares in direct exchange 
for the outstanding 961.200 
ordinary shares of Le Vallonet it 
does not already own. 

Mr Payne pointed out that 
Atlantis has a strong balance 
sheet and is not raising mane; 
in order to reduce debt He ateo 
said that two-thirds of the funds 
for Atlantis' joint-ventures to 
date had been raised in the UK 

“ We’re known in London. We 
are not selling 100 per emit of 
our equity for exploration. We 
are a futly operational oil 
company, not a drilling fund. 
Atlantis owns .no rrgs, so really 
we can benefit from the present 
conditions by getting cheaper 
contracts for our projects,” said 
Mr Payne. 


The placing, which has been 
carried out by de Zoete & Sevan, 
UK stockbrokers, has raised 
£L35m for Atlantis, or about 
C$3m. Mr Payne will receWe 
05 Lm of the funds in exchange 
for Ms private oil and gas 
properties. He will retain 51 per 
cent of the company’s shares and 
together with his directors' 
interests, will have effective 
control erf 65 per cent of the 
equity. The rest of The money 
will go into Atlantis as working 
capital. 

For the year ended last Dec- 
ember. Atlantis recorded a loss 
of C$222,044 on revenue of 
$686,918. Oil and gas revenue for 
the year totalled 544,104. The 
company projects cash flow from 
oil and gas to reach S1.68m by 
1983 and S2J2m in 1984. Net 
assets of the company is given 
as S25.9m. the bulk of which is 
the discounted worth of proved 
and probable reserves owned by 
the company. 

Revenues generated from 
operations will be used to finance 
the edevelopment and expansion 
of the business- " The directors. 


therefore, do not anticipate that • 
any dividends will be paid by 1 
Atlantis in the foreseeable : 

future. 

Stockbrokers to the company ■ 
are de Zoete and Bevan. Deal- \ 
jngs in the shares are expected j 
to- begin this Thursday. j 

• comment 

Atlantis is a small company 
seeking ' a small amount of 
money and its ■appetite has pre- 
sumably been ' sated by de 
Zoete’s private clients and in- 
house funds. This is just as 
well as London has been glutted 
over the last 18 months by oil 
men from Can ada who promise 
jam tomorrow for pounds today. 
A lot of those companies are 
trading at steep discounts to net 
assets and even top-quality com- 
panies in Canada and the U.S. 
are down to as much as a 70 
per cent discount None the less. 
Atlantis is only opening up a 
small market in its shares, so its 
21 per cent discount may just 
hold. With only a handful of 
employees, no rigs on its bands 
and no troublesome borrowings, 
Atlantis does seem adequately 
equipped to last out the current 
slump. The figures in its pro- 
spectus. however, were compiled 
last December and much has 
changed since then. For in- 
stance, projected oil prices have 
declined steeply and discount 
rates fnr net cash flow have in- 
creased to as much as 30 per 
cent. (Atlantis uses a 15 per cent 
discount rate.l The company 
argues that certain regulatory 
changes . since December have 
balanced the score by improving 
the picture for future oil and gas 
sales in Canada. This. like a lot 
of doings in the oil business these 
days, must be taken very much 
on faith. 


Ecobric to join 
USM by placing 


M. F. North accepts 
£9m takeover offer 


MR DAVID BARCLAY and Mr 
Frederick Barclay and the board 
of M. F. North have reached 
agreement on the terms of an 
offer valuing the capital of the 
hotel propietor at £9.25 m. The 
offers have been made by Hill 
Samuel and Co. on behalf of a 
private company wholly owned 
by the Barclays. 

The terms are 37p cash for 
each ordinary share in North, 
and 66p for each 4.2 per cent 
cumulative preference share of 
£1 each. 

Arrangements will be made 
whereby ordinary shareholders 
in North may elect to receive, 
instead of cash, the same nomina 1 
amount of 10 per cent unsecured 
loan stock supported by a bank 
guarantee. The loan stock wall, 
at the holder’s option, be repay- 
able at par as to a maximum, of 
50 per cent of each holding on 
April 6. 1983, and as to the 
balance on or after April 6 19S7. 

North has recently announced 


the sale nf two of rts London 
hotels for a combined cash 
consideration - of some £2m. 
Following these sales, it will 
owq and operate nine hotels, of 
which four are in London, one 
is in Surrey and four are on 
the South Coast. 

The consolidated net assets of 
North at December 31 1981 attri- 
butable to the ordinary share- 
holders amounted to £8.8m and 
the profit and loss account 
showed a pye-tax profit for the 
year of some £84,000. 

The board of North and its 
financial advisers. J. Henry 
Schroder Wagg and Co., 
consider the terms to be fair and 
reasonable. 

Irrevocably undertakings to 
accept the ordinary offers have 
been given in respect of 15.02m 
ordinary in North, representing 
90. 1 per cent, including 198.750 
ordinary shares beneficially held 
by certain directors. I 


ICI pulls out of 
Japanese venture 


ECOBRIC, the newest entrant to 
the USM. publishes its prosper- 
tus today. The company is 
.joining by way of a placing 
which capitalises the company 
at £1.76 m. 

The bulk of Ecobric's turn- 
over, which was £2. 6m in the 
year ended last September, 
derives from its process of turn- 
ing cast-iron borings into 
briquettes which are then sold 
to industrial customers, such as 
Ford. The north London group 
also carries out demolition 
work. 

Ecobric has three classes of 
shares, including new ordinary 
shares, ovisting ordinary a nd 
existing deferred. The placing 
consists of 100,000 units of the 
shares, with each £4.60 unit con- 
taining three ordinary shares, 
one existing share and one 
existing deferred share. 

The existing ordinary shares 
are not eligible for a dividend 
for the financial year ending 
September 30 1982. The deferred 
shares are to be converted info 
ordinary shares when the pre- 
tax profits of the company 
exceed £486,112, but not before 
1984. 

The directors forecast pre-tax 
profits this year erf not less chan 
£350,000 and in view of the fact 
that a price increase will come 
into effect this month, they 
project that the pretax goal 
required for the conversion of 
tiie deferred shares should be 
reached by the year ended 
September 19S3. 

The company’ expects to pay a 
dividend of 10.5p net on the 
ordinary shares for the year 
ended this September. 

Dealings in the shares are 
expected to begin next 
Wednesday. Ecobric's stock- 
brokers are Sternberg. Thomas 
Clarke & Co. 

• comment 

Ecobric is a small company' in 
a specialised niche which has 


RECENT ISSUES 


EQUITIES 


Inue if =!f Soi 

price | niff 2al 


1882 


stock 


K '■ High Low 


i"s j . ’.Mil-toMfl 

lgna;+or.>fco|E«|0* ; «. 5 

jl j - i° SfI**; 


«■ i - 30/7 
'• t.p: - 
(250 FJ».'23,6 
46 iF.P.:30/7 
■F.P. 25(6 
■F.P.'15 4 
'F.P. 4/6 
F.P.'30/7 
F.P. 28)5 


>90 

15 

<260 

5 ®So 


*87l s p;F.Pj25/6 

{137 F.P.130/7 
jl05 F.P.. 2'7 
600 IF.PJ 2/7 
*150 'F.P. - 
77 ; F.P. 14/7 
140 ?>P.29/6 
*■; 'F.P. - 


13 : 11 jArgyll Foods Warr'ta.i 12 

48 ! 45 Argyle Trust ' 45 

280 i860 Assoc. Heat Servlces 270 

65 | 50 .Balratow Evesfip ; 50 

101 J 92 '*BladctMiCtvaeli20p, 92 
i 32 ; 19 ICambrian * Gen. 7*p; 30 
435 |293 4-Con t. Microwave. ..1420 

59-52 52 

.166 1140 6-Druck Hldgs. 166 

98 ■ 84 Electro-Prot.USM.50; 90 
17 i 10 cGroup Inv Option—..; 12 

185 1150. '#McCarthy&Stofle J1B4 

121 '110 l>S>MUes33 lOp. 112 

630 1595 OrUlame SA lUSSl.B0j;6OO 
■ 155 150 -{-Oilfields insp. Srvc.,132 

97 88 !«RadioCity *A' NV... ; 88 

186 160 ’4-Ruddle 1G.1 10p 184 

. 90 ! 40 Zambia Cons Cpr 10K.BQ 


bS.O ',2.1:4.8113.7 

| bl.61|2.5'4.6:12£ 

! IU3.0 ! 2.4; 4.7 12.7 

'jam! sja! m>:ib.6 


;+i 


'+i 

'-is 

i 


,b2.3 1 2.5! 

-jUQUte S.B. 

Ib5.75 2.7 1 
iudM > 4.3: 
bQSOe 2j8 
>u2.1 ,3.7 
.'b6.6 [1.5 
•ib3^ . 2.6.' 


2 j 0 .njB 

0.9' 12.1 

A51U 
2.61 9.7 
4.6 9.6 
2.0! 17.4 
9.1T0.3 
2.6.21.7 


FIXED INTEREST STOCKS 


: a ^ o 


1982 


Issue _ 
price ss ° e<£ 

£ £* *oTi ; 

< a High) Low ; 


Stock 


,+ or 


o— 
O a 


:100 

Nil 

9.7 

7 pm 

Upm 

"100 

£10 

26/8 

11 ->4 

10^2 

rc 

- F.P. 

— 

M6I[ 

150 

101 

• F.P. 

30»7 

109 

107 

. 100 

F.P, 

■ 9/7 

■101 

9213 

98.55 £25 

8.10! 26 

23*4 

100 

;f.p. 

— 

1001* 

100N 

100 

F.P. 

— 

99T* 

99?g 


99.345 £26 
■1100 • F.P. — 

•■100 F.P. - 


-Benlox 8J Com/. Cum, Rd. Pf. 14pm- 

:BoumomouthWatei9£Red. Prr.'8789| 11J< 
j First Nat. 13*pc Conv. Una. Ln. 1987_,130 ; 


and Bk. 145 Sub. Uns. Ln. 2002-07.. 24i* -U 
on wide Bdg. Soe. 13f£fc -3/6/83 |_ 100 1*: — 

Do. 14% ,4/7/83 j_r 997 a 

25 U 24lg New Zealand 14U% 1987 1 25l e ,+ l* 

47 38 Rri & Northern 4pc Net Cum. Prf. £1 41 

46 ; 45 . Do. 4.7pe Net Cum. Prf. £1' 46 : 




RIGHTS” 

OFFERS 


1 ® 3 ’ 

leeue a® - 

Latest 

Ronunc. 

1 

1982 


'll § a. + or 

P . <a i 

• a 

High Low i 


i o a 



166 

170 

135 

174 

25 

50 

325 

215 

25 


Nil 9-7 
F.P. 13,5 
F.P.-28/5 
F.P. 18/6 
Nil — 
F.P. 24.-6 
F.P. 17j6 
Nil 5.7 
F.P. 10/S 


6/8 1 22pm: 
24.8 190 

9;7 1 1BQ 

30.7 1 233 

2pm 

15iB 58 
30-7 445 

13.8 ■ 40om 
10;6 • 25 . 


18pm’Appl<ed Computer T«c« ..... 18pm ... 

180 Bank Leu ml iUKI £1 185 ..... 

156 Cartess Capel lOp. 156 —2 

218 Grand Met 50p 228 

2pm Jenks & Cattell ... ..... .... 2pm ..... 

52 Press fWm.i lOp 56 - 1 

380 Saateh- A Saotcfn lOp 388 -2 

28pm Skctchley- .. .... . .....' 37pm 

24 Young iH.i... .... 26 . , 


Renunciation dale usually last day far dealing free of stamp duty, b Figures 
based on prospectus estimate, d Dividend rate paid or payable on part o t 
capital: cover based on dividend on full capital, g Assumed dividend and yield. 
z Indicated dividend: caver relates to previous dividend. P/E ratio based on latest 
annual earnings, u Forecast dividend: cover based on previous year’s earnings. 
F Dividend and yield based on prospectus or other official estimates for 1982- 
Q Gross. T Figures assumed. • Figures or report sweitad. ♦ Cover allows for 
conversion of shares not now ranking (or dividend or ranking only tar restricted 
dividends. 5 Placing price, p Pence unless otherwise indicated. 7 Issued by 
tender. || Offered to holders of ordinary shares as a “rights.” M laaued by way of 
capitalisation. 9$ Reintroduced. M Issued in connection with reorganisation, 
merger or take-over. ||g Introduction. □ Issued to tanner preference holders. 
■ Allotment letters (or fully-paid). • Provisional or partly-paid allotment letters. 
* With warrants. tt Dealings under special Rule. •£> Unlisted Securities 
Market, tt London Listing. t Effective Issue price slier scrip, t Formerly 
dealt in under Rule 163,2) (a). fit Unit comprising live ordinary and three 
Cap. shares. A Issued free as an entitlement to ordinary holders. 



BY SUE CAMERON 

UK-BASED Imperial Chemical 
Industries is selling its 50 per 
cent stake in the Japan-based 
Kao-Atlas chemical concern to 
Kao Soap— the other partner in 
the joint venture— for Y3.4ba 
(£7.7m). 

ICI. which had total sales of 
£25 Om in Japan last year, said 
it was selling its interest in 
Kao-Atlas because the company's 
product portfolio did not fit in 
well with its other Japanese 
operations. 

Agricultural chemicals, dye- 
stuffs. pharmaceuticals ami in- 
organic materials such as 
catalysts are I Cl’s main 
Japanese businesses. The chief 
interests of Kao-Atlas, on the 
other hand, are . surfactants, 
which are used in detergent 
manufacture. and ' polyester 
resins, which go into the pro- 
duction of plastics.' , 

Tbe UK-based group -acquired' 
its stake in Kao-Atlas when it 
bought the U.S.-based Atlas 
Chemicals in 1971 for £65m. 
Atlas and Kao Soap had set up 
the joint venture eight years 
earlier. 


Last night ICI stressed that it 
attached considerable import- 
ance to the Japanese chemicals 
market, which is one of the 
largest in the world. As well as 
selling chemicals under its own 
name in Japan, ICI is a partner 
in three joint ventures there. 

One is with Asahi Glass, and 
covers the manufacture of a 
high-performance plastic brand- 
named Flu on; another is with 
Sumitomo in the pharma- 
ceuticals field; and the third is 
with Teijin in the agro-chemicals 
sector. ICI also has a 25 per 
cent stake in Nippon Polyure- 
thane Industry. Japan's biggest 
polyurethan producer. 

ELECTRA INVESTS 

Eleetra . Risk Capital has 
invested £251,244 • in Temple- 
down. in exchange for a 45 per 
cent interest, to enable tbe com- 
pany . to establish more 
restaurants. 

Tempi edown owns two London 
restaurants, tbe Cafe Marengo 
at Regent Street, and .the 
Biasserie Marengo at Victoria 
Stret. using a simple food 
formula. 


SPAIN 


Ju'y 2 


. 1381 


Price 

High 

Low 

p 

% 

366 

335 

Banco Bilbao 

340 

382 

273 

Banco Central ... 

273 

324 

242 

Banco Extenor ... 

242 

337 

306 

Banco HispeitO 

313 

115 

109 

Banco Ind Cat .. 

109 

367 

312 

Banco Santander 

312 

235 

175 

Banco Urquijo ... 

ITS 

395 

351 

Banco Vacaya . . 

351 

SO 

216 

Banco Zaragou ... 

237 

180 

90 

□ragados 

104 

70 

60 

Espanola Zinc 

67 

66.5 

55.2 

Fecsa 

55.2 

50 

26 

Gal Preciedoe 

26 

68.2 

56.2 

Hidrola 

56.2 

59 

42 

Ibarduero 

42 

1045 

71 .5 

Petrotoos 

71.5 

101 

94 

Patrolibcr .... 

91 

40 

5.5 

Sogefiej 

6 

74 

67 

Telefonica 

67 

68 

52J> 

Union Elect 

525 


little glamour- in iL It plans to 
use its USM listing as a platform 
for expanding its scrap metal 
processing business, which is 
now working to capacity. Thh. 
division has been almost wholly 
dependent on one customer. 
Ford, but Ecobric has been work- 
ing hard to diversify ’ and now 
sells to same 30 buyers. Ecobric's 
other business, demolition, will 
account for 46 per cent of Eco- 
bric's pre-tax profits but shouldn't 
play a major role in the com- 
pany's long-term plans. Still, 
there's very little way to gauge 
the future for briquettes made 
of cast-iron borings. The com- 
pany is trying to whip up enthu- 
siasm with a fairly generous divi- 
dend. The promised pay-out of 
10.5p on the ordinary gives a 15 
per cent yield, but this works out 
to 9-8 per cent on the whole 
£4.60 package and 18 per cent 
once the existing ordinary rank 
for dividend. A prospective 
fully-taxed p/e. based on all the 
ordinary shares, is a non- 
demanding 6.9 per cent. 


Notice to the Holders of 

CENTRAL AMERICAN BANK 
FOR ECONOMIC 
INTEGRATION (CASED 

U.S. '520,000,000 Floating Rate 
Serial Notes Due 1994 

Effective Aqgust 2. 1982, the 
specified office of The Indus- 
trial Bank of Japan Trust 
Company as Fiscal Agent for 
the above-described, issue will 
be 

245 Park Avenue 
New York, S'.Y. 10167 TJ-S-A. 


July 5, 1982 


ALLIED IRISH BANKS LIMITED 
U&SM.00Q.000 Floating Race 
Notes due 1987 

(n accordance with the pro- 
visions of the Nores, notice b 
hereby given that the Rate of 
interest for the next 6 months' 
Interest Period has been fixed 
at 16i v t per cent per annum. 
The Coupon Amounts will be 
U.S.S84.65 for the U.S.S1.000 
denomation and US.M232.64 
for the U.S.S50D00 denomina- 
tion and will be payable on 6th 
January, 1983 against surrender 
of Coupon No. 6. 

5ch July. 1982 . 
Manufacturers Hanover Limited 
Agent Bank 


PENDING DIVIDENDS 

Dates when some of the more important company dividend 
statements may be expected in the next few weeks are given in the 
following table. The dates shown are those of last year’s 
announcements except where the forthcoming board meetings 
(indicated thus*) have been officially notified. Dividends to be 
declared will not necessarily be at the amounts in the column 
headed '* Announcement last year.” 

, Announce- 


Dale 

A crow July 28 

"Alexanders 

Discount.. July 19 
Allred 

Co Hold* July 16 

Allnatt 

London July 16 

•Amertham 
International.. July 12 
*AssoCioied 
Newspapers.. July 15 
Ault & Wiborg Aug 5 
Automotive 

Products... Aug 13 

Bank 

'Leuml (UK). .July Z7 
Bath and ' 

Portland. July 15 
"Billon (P.) ...July 26 
Brown (J.) ..July 24 
Barclays 

Bank Aug 6 

"Bibby (J.) Aug • 4 

British 

Aluminium.. .Aug 11 
"Cable and 

Wireless... July 13 
Carrington 

Vryel1a..Aug 13 
Commercial 

Bank Aust...Aug 13 
Commercial 

Union.. .Aug 11 
"Daily Mail and 

Genl Trust. July 15 
Davy Corpn ..July 23- 

"Distillers July 15 

Dixons 

Photographic.. July 30 
•Dowry July 15 

"Fitch Lovell ...July 29 
General 

Accidant .Aug It 

Gestetnar July 16 

Glynwad ......Aug 5 

•Granada Uuly 6 

GUS July 16 

•HAT Grouo -..July 13 
Haslemere 

Estates ..July 16 
Hillards Aug 3 


mane last 
year 

Final 0.75 

Interim 5 5 

Final 2.087 

Final 3.4 

Final 3.57 

Interim 4.5 
Interim 0.5 

InterimJ.O 

Interim 3.15 

Interim 2.0 
Final 4.4 
Final 2.S 

Interim 10.5 
Interim 2.4 

Interim 2.0 

Final due 

Interim ml 

Final due 

Interim 485 

Interim 11.0 
Final 4.7 
Final 7.75 

Final 2.179 
Final 2.8 
Final 3.71 

Interim 7.S 
interim 1 25 
In rerim 2 45 
Interim 1.75 
Final 8.0 
Final 1.25 

Final 486 
Final 2.75 


Date 


Announce- 
ment last 

/•or 


Hogg 

Robinson.. .July 21 Final 3.0 

Hoover Aug 6 Interim due 

Illingworth 

Morns.. July 17 Final ml 

•ICI' - July 29 Interim 9.0 

"Imperial 

Com Gas.. July 6 Filial 5.3 
"Imperial 

Group July 8 Interim 2 75 

Initial July 20 Final 6 .25 

Lax Service ...July X Interim ,2.8 
"Uoydc Bank ...July 23 Interim 8.625 

.Lonrho —July 30 Interim 3.0 

Mfl Furniture. .July 23 Final 1 82 
Magnet and 

Southerns. ..July 14 Final 3.0 
"Midland Bk ..July 30 Interim 8.0 

"NatWest -..July 27 Interim 9 625 

Nottingham 

Manufctrg.. July 27 Interim 1.1 
Ocean 

Transport . .Aug 11 Interim 4.3 
Preedy (A.J ...Aug 3 Final 2.75 
"Rank 

Organisation. -July 12 Interim 4.8 
Rentokll —'...'.Aug 5 Interim 1.05 
"Rothmana 

international.. July 20 Final 2.65 

"SGB July 5 Interim 2.3 

Securicor : Aug 12 Interim 0.5S 

Smith and 

Nephew... Aug 11 Interim .1.3 

Tl Grouo -Aug 12 Itnirin 12.5 

Taylor 

Woodrow... Aug 11 Interim 3.15 

"Thorn EMI July 15 Fine! 10.575 

Transport 

Development ..Aug 10 Interim 1.4S 

Ultramar Aug 13 Interim 5.0 

•Urriqate — July 21 Final 4.0 

•Union . 

Discount.. July 21 Interim 9 0 

Vantona July 28 interim 3.0 

Wagon 

Industrial... Aug 4 Final 3.0 
Wool worth 

(F. W.J...AUO 12 Interim 1.225 
• Board meeting Intimated, t Right* 
Issue since mads, t Tax free. 5 Scrip 
issue since made. 7 Forecast. 


M. J. H. Nightingale & Co. Limited 


27/28 Lovat Lane London EC3R 8EB 


Telephone 01-621 1212 


raws ' 

capitalisation Company 

4,044 Ass. Brit. Ind Ord. ... 

— Asa. Brit. ind. CULS... 

4.110 Airsprung Group 

1.075 Armnage & Rhodes 

13.870 Bard on Hill 

1.375 CCL 11 pc Conv. Pret. .. 

4.189 Cinriico Group 

4.643 Deborah Services 

4.143 Frank Horsell . . .. 

10,680 Frederick Parker 

978 George Blair . 

3.960 ind. Precision Castings 

2.532 Ibis Conv Prel 

2.657 Jackson Group 

18.S62 James Bnrrougb .. . 

2.346 Robert Jenkins 

3.900 Scruttous ’■A” 

3.783 Toiday & Carlisle 

3.740 Twinlock Ord 

2.157 Twmiocl 15pe ULS 

3.815 Umlock Holdings 

10,504 Walter Alexander 

5.461 W. 5. Yeeres 

Pnces row available 


. P/E 

Change Grose Yield Fully 
Price on week div.(p) % . Actual taxed 
120 — . 6.4 5.3 10.8 13.4 

129 +2 10.0 ■ 7.8 . — — 

71 — .6.1 a.e 8.1 13.9 

43 — 4J 10.0 3.6 8 1 

.227 + 6 11/4 . 5.0 9 5 12.0 

110 — 15.7 14.3 — _ 

265 -r- 26. 4 10.0 10.7 12.0 

60 — 6.0' 70.0 3 0 5.6 

130 — 6.4 4.9 11 7 24.1 

74. — . 6.4 8 6 3.8 7.2 

98 — 7 3 7 4 7.1 10*7 

108 + 1 15.7 14.5 — _ 

ICS - 2 7 5 .7 1 3 2 6.7 

120 + 3 9.6 8.0 8 8 9.8 

.230 — 31.3 13 6 3 2 8 1 

.75 + 4 5.7 7.6 9.7 11 7 

155 — 11.4 7 4 7.0 11.9 

17 1 ! + 1 — — — — 

79 — 15 0 19 0 — — 

25 — 3 0 12 0 4 5 7.6 

S3 — 64 7.7 55 97 

234 - 1 .14 5 6.2 6.1 12 3 

gn Prestal page 43146, 


BASE LENDING RATES 


AJJ.N. Bank 12{% 

Allied Irish Bank 12 1 % 

American Express Bk. 124 

Amro Bank 12J% 

Henry Ansbacher 121^ 

Arbuthnot Latham ... 121% 
Associates Cap. Corp. 13 % 

Banco de Bilbao 12{% 

BCCI I2j% 

Bank Hapoalim BA! ... 124% 

Bank of Ireland 

Bank Lemni (UK) pic 124 

Bank of Cyprus 12i^ 

Bank Street Sec. Ltd. 13|% 

Bank of N.S.W 12J% 

Banqoe Beige Ltd. ... 124% 
Banque du Rhone et de 

la Tamise SA. 13 % 

Barclays Bank 121% 

Beneficial Trust Ltd. ... 13J% 

B re mar Holdings Ltd. 13 j% 
BriL Bank of Mid. East 12J% 
I Brown. Shipley ......... 13 % 

Canada Perm’t Trust.. 13 % 
Castle Court Trust Ltd. 13 % 
Cavendish G'ty T’st Ltd. 14 % 

Cayzer Ltd. 12‘% 

Cedar Holdings 13 

I Charterhouse Japhet... 12{% 

Choulartons 13 % 

Citibank Savings J12f% 

Clydesdale Bank 124% 

C. E. Coates 13j% 

Comm. Bk. of Near East 121% 
Consolidated Credits... 12j% 

Competitive Bank “12j% 

Corinthian Secs 121% 

The Cyprus Popular Bk. 12} % 

Duncaa Lawrie 131% 

Eagil Trust 124% 

E.T. Trust 121% 

Exeter Trust Ltd 134% 

First Nat Fin. Corp,... 15 % 
First Nat Secs. Ltd.... 15 % 
Robert Fraser 13 % 


Grindlays Bank tl2J% 

B Guinness Mahon 124% 

BHambros Bank 124% 

Hargrave Secs. Ltd. ... 12J% 
Heritable & Gen. Trust 124% 

■ Hill Samuel $12i% 

C. Hoare & Co T12i% 

Hongkong & Shanghai 121% 
Kingsnorth Trust Ltd. F4 % 
Knowsley & Co. Ltd. ... 13 % 

Lloyds Batik 121% 

Mallinhall Limited ... 124% 
Edward Manson & Co. 131% 
Midland Bank 124% 

■ Samuel Montagu 12|% 

■ Morgan Grenfell 121% 

National 'Westminster 124% 
Norwich General Trust 124% 

P. S. Refson & Co 124% 

Roxburghe Guarantee 13 % 

E. S. Schwab 12|% 

Slavenburg’s Bank 121% 

Standard Chartered ...;;i24% 

Trade Dev. Bank 124% 

Trustee Savings Bank 121% 

TCB 12|% 

United Bank of Kuwait 124% 
Whiteaway Laidlaw ... 13 % 

Williams & Glyn's 12f% 

Win trust Secs. Ltd. ... 12J% 
Yorkshire. Bank 12|% 

■ Members of the Accepting Houses 
Committee. 

• 7-day deposits 9-5%. 1. month' 

9.75°„. Shore term CS.0Q0/12 
month IS.l*^' 

t 7-day deposits on sums of: under 
n0.000 9VS. £10.000 up to 
£90.000 10V%. £50.000 and over 
11%. 

t Cell deposits £1,000 Bnd over 
9V1- # 

p 21 -day ’deposits over £1.000 10^%. 

S Demand deposits 9*a%. 

S Mortgage base rate. 


REPUBLIC OF AUSTRIA 
U.S.$50, 000,000 8%% Bonds 1990 

S. G. '.VAR5URS & CO. LTD- announce that trie sixth redemption 
instalment of Bonds due 15th August 1982 tor a nominal value of 
ILS.S1 ,000,000 has been met by purchases in the market. ' - - 

U. 5X3 6,0 00 POO nominal amountof Bonds will remain outstanding 
after 15lh Augu'SI. 1982. ' 

The fottov.mg Bends drawn lor redemption on the dales staled 
halo*/ have not as yel been presented for payment .— 

151ft Aagust. 1977 
Nos: 462: 26255:32300 

T5fh August. 1978 

No: 1710 

' 15 tft August. 1981 

Nos: 501: ifi23: 16S2: 2199: 3333: 3391: 4125: 12555 : 22731: 
24116: 24549: 26599: 28774: 29076: 37646 


30, Gtesnam Street. 
London EC2P 2ES 


5th July. 1982 


M ANNIN DIAMOND 
INVESTMENTS 
LIMITED 

Bid: 360 Offer. 400 
Tel: 0624 S22091 
Telex- 628032 MAN XI \ G 


J- NAY. at SL6.8I 

ESI 4X04 < DRs 

fllfl V1KING RESOURCES 
■■■ INTERNATIONAL 
N.Y. 

IKFO Pierson 
Ketdring ft Moreen N Jf. 

. Herengrecfit 314, Amsterdam 


ecobric HOLDINGS pfc 

ta-r— - “ ,3 “ b W6 


Authorised 

r 

1.750.000 

1 ,000,000 

2.750.000 


SHARE CAPITAL 


Ordinary Shares of £1 o»cb 
Deferred Shares of £1 e*eh 


iMiwf and now 
bmiaa'ttsuoa 
teUypaiO 
£ 

l,1fiQ.S0Q 

1,000.000 

2,160,500 


of S00- 000 . Cnd loo 000 existing Deferred share* o* «-00 each 

one exwSng Octoired share at £4.80 per unit, •fpl'cehon 
share and one ev^i g Exchange for the grant of 

permission Jo dcai • Ordinary shares to ho tutted. In the 

uSfSs«uriiiM M?rkrt. II IS emphasised that no application hu 

Shares have boon offered to and are available through the Mark*. 

DaHtt-uters relation to to* Company are available the Extol 
d.r^SrSetSc? and 60P.OS <st the prospectus may be obtained 
HrSffbSi Mura Oft any wookday (exciuduip Saturdays 
and public holidays) up to and Including 12th July 1982 Jrmn:— 

Sternberg. Thomas Clark* & Co., 
provincial House, 

218-226 Blshopstf ate, 

London, EC2M40D 


\ 


5th Juiy. 1982 


fa 




FIRST COSTLe ’ 

€L€CTi30lfllC$! 



FIRST CASTLE ELECTRONICS 

Extracts from Chairman s Statement 
* 'Excellent progress in the development of our group during 
the year 1981'“ 

* increase in profits after lax of 65°o and earnings per chare 
up39°o 

* Increase in dividend ol SO 6 * over last year . 

* "Position further strengthoned by the acquisition ofthe 
Ormandy AStoHery Group." 

* Company achieves ‘'Trustee" status. 

★-Engmeennq Today" Annual Finance Stnwy places 
company 1 1th in compound annual earning:, growth and iwh 
in net return on equity. 

Survey covers top 100 companies m 1981. 

* Dividend. A second rntwinidividend on ZB2p 

gross) making a total for year of 2.1 Sp net (3 Q« p gross). 

Copies of the report and accounts obtainable from: 


mmmm The Company Secretary. 

’32 FIRST CASTLE ELECTRONICS pJJL. 

j—SS WaterfletdMBk Bahnonri Road, 
S5KS on Watery Lane, Darwen, Lancashire. 




This advertisement is issued in compliance with the 
requirements of the Council o f The Stock Exchange . 

ROTAPRINT pic 

Rights issue oF 1,446,428 1U per cent Cmfflflttive 
Convertible Redeemable Preference Shares of £1 each at par 

The Council of The Stock Exchange has admitted the 
1.446.42S 114% Cumulative Convertible Redeemable 
Preference Shares in the capital of ihe Company to the 
Official List. 

Particulars are available in the Extel Statistical Service 
and copies may be obtained during usual business hours 
on any weekday (Saturdays excepted) up to and including 
23rd July. 19S2 from: — 


ROWE & PITMAN. 
City Gate House, 

39-45 Finsbury Square. 
London EC2A 1JA. 

5th July, 1982. 


GUINNESS MAHON 
& CO. LIMITED. 
32 St Mary at Hill, 
London EC3P 3A J. 


This advertisement U issued in ConnecUun with the introdneum of 
Antofagasta Holdings P.L-C- and in compliance with the requirements of 
The Council or The Stock Exchange. It docs not caostiloie an invitation to 
the public to subscribe for or purchase any Stares. 

ANTOFAGASTA HOLDINGS P.L.C. 

« ,la..~ r s'Mrdia LnxioMi.\* ll.'W 

Shore Capital 

Authorised . I«n»j mf M f y pant 

. £ £ 

2,000.000 3.5^rCumobtivcPrefcrcTtccSharcsof£l each 2,000.000 
7-300.000 Ordinary Shares of £ I each 6,415,344 

Following a Scheme of Arrangement under Section 206 of tbe 
Companies Act 1948 Antofagasta Holdings P.L.C. acquired tbe issued 
share capital of Antofagasu (Chili) and Bolivia Railway Company P.LC, 

- "f^'^ooncil of The Stock Exchange has admitted the above 
mentioned Preference and Ordinary Shares of Antofagasta Holdings P.L.C. 
to tbe Official List. Par ticulars relating to the Com pan}' are available in the 
Extel Statistical Service. Copies of tbe statistical card may be obtained 
daring ; normal business hours on any ucefcday (other than Saturdays) up to 
and including 19th July. 1 982 from:— ■ 

Laurence. Prust & Ca, 
Basildon House. 

. 7/11 Moorute. 

London EC2R 6AH 

Sth July. 1982. 


Bardays Merchant Bank Limited, 
IS/t6Gracednirch Street, 
London EC3V0BA 


Public Works Loan Board rates 


Year* 

Up (O 5 

Over 5, up to6 

Over 6, up to 7 

Over 7. up to 8 

Over 8, up to 9 

Over 9, up to 10 ... 
Over 10, up to 15... 
Over 15. up to 25... 
Over 25 


by HIM 

m 

Mi 

13* 

131 

14 

14 

14| 

141 

14 


Effective June 39 
Quota Soane repaid - 
at 
A* 

M* 

13* 

13| 

14 
141 

14! 

M* 

14 


Non -Quota toons A" repair 

at 


turityS 

HyEiPt 

A* 

maturity! 

14 

14} 

Hi 

Hi 

14J 

14* 

\H 

IS 

14i 

Ml 

Hi 

15 

I4i 

14* 

14Z 

15 

Hi 

Hi 

Hi 

15 

Hi 

Hi 

Mi 

15 

Hi 

15 

13 

142 

14 

15 

M2 

142 

14 ' 

Mi 

Hi 

Hi 


, v . , ” . . 14 . • *'« wez lit 

non^Srr' 3 I°"?J5L a ^- 3 p ? r C€nt higher in each ease thai 
la . ans A - . t Equal instalments of principal. ♦ Rcpaymen 
annuity (fixed equal half-yearly pa?men& to SS 
_ c| P al and tntcresi I. § With half-yearly payment* of intrresr onl> 


finance for industry term deposits. 

131 .1, i!i L. h, ?, JS 

to and fonljcr infontuion from Th?: Tre saarr, Finance for 

8X11 < 01 '^ 7822. Exfc367). 

ETEI W “Bank ofHryLmd. EFJ-FFI 

Wm Bn fl ® "OldinK company for ICFC and FCL 






Am 


"'•> ■'> l.. 


•i3n \ 


Financial Times Monday July 5 1982. 

Die !; Gompuin ud Market* 


15 


INTERNATIONAL CAPITAL MARKETS 


*•1. 





CREDITS 


East European loan 
market begins 


to show signs of life 


THE. PROSPECT of Bunnaiy 
wia^B a^200m to $250m credit 
tn Use- Eargmart»t hare im- 
proved, with todkartiotH on Fri- 
day that &• group of banks Jed' 
by - Manq&ctmws-". Hanover 
wotfld somite ready to subnjfit 
a formal offer to compete Use 


TMs w^sr 'just- one otf s ev era l 
devatopaneptB test . week: point- 
ing:- to renewed movement on 
Eastern Europe’s debt problems. 
While on the other .side. of Hie 
wortd, as already, reported, 
Asgentiua offlcMy confirmed 
that k plans to restructure ite 
$36bn foreign debt : 

The Hungarian loan, e ap c etwf 
to J>e for three years with a 
w a ii g lu oflj per cent above 

E urodo llar rates; fefintfetstear to 
restore confidence in a borrower 
Suit has been cn£ off Cram. Hje 
syndwatetT credit maifosf to toe 
wake'of the TVaMl 'tgO.' T frwwe**- 
ias debterisee;': ’ *. •* v 

As such it la Intended to 
supplement . ■ the - short-term, 
credits, totalling over $500m,. 
provided by Western centre- 
banks. to 'tide-: Hungary over 
until it can draw on the Inter- 
national Monetary TundT 
But bankers cautioned last 
week that even if -Hungary - 
accepts the terms of the loan, 
it will.-still. .be a. dub deal 
handled by a limited number of 
banks. Hie deal has taken a 
long time tn assemble and there : 
is : as yet no indication, that it 
would mark a general, reopen*, 
ing.of the J&socredit market to 
Hungary. - ; 

The fact fc that market 
caution to wards Eastern Europe 
remains strong^ and this, is also 
underlined iff ;tfce rather luke- 
warm Initial response to Yugo- 
slavia’s efforts:- to raise an 18- 
month bridging loan of some 
$200m to- $300m - from. North 
American banks. ' 

Despite Yugoslav- . indications, 
to the contrary, bankers said 
last week that no formal offer 
to raise the money, ha* been^ 
made by the banks, which are 
simply examining, the project 
on the basis of a 1 percentage 
pbiht margin over the TLS. 
prime- fate or If -lifer cent over 
London interbank offered rate. 

. ’As in the Hungarian case, 

•• these margins -are very 
■ generous by comparison with 
: previous borrowings, but some 
• bankers warned that Yugo- 
slavia will have ah -. upinH’ 
struggle overcoming the soured 


relations- with the market 
following, ife unsuccessful effort 
to raise, a . $400m syndicated 
credit .last year. . 

The current credit may also 
be harder to organise than that 
for Hungary: because- only 
North American hanks will he 
. invotred . which limits the 
choice of partiejpants. ‘ 

Meanwhile, Romania has 
formally requested a commer- 
cial bank rescheduling of some 
SZiObnih debts falling due this 
year and outstanding from last, 

. while Poland is to . meet 
.-Western bankers in Vienna ibis 
week , - for preliminary dis- 
cussions on rescheduling 1982 
maturities of slightly more 
.Jtom. $a»n. 

A feature on these discus- 
klons -Is iikely to be pressure 
on iPoland' txKpay at least some 
.interest on its 1 bank debt. 
Arrears so far this year are 
fllready.put at around $lbn, and 
- this ij-one reason , why banks 
have moved to initiate re- 
scheduling discussions' before 
similar -talks- have got under 
-w^~. betwee n .Pola nd and 
"Western' governments. . 

Argentina’s announcement 
that it wishes to restructure its 
. ¥3Gbn foreign debt was not un- 
expected as its reserves^ have 
been seriously depleted since 
the Falklands ' crisis, but 
bankers generally believe' that 
little meaningful progress can 
he made before Britain lifts 
the freeze on Argentine assets 
held in the UK. 

Mexico is, however, pr e ss in g 
ahead with Its large borrowing 
pro gra m m e. It 4s understood to 
be arranging a 8300m credit for 
the ofl concern Peiner to be 
provided by Canadian banks 
under, the leadership of the 
.Royal Bank of. Canada. This 
would be a short-term facility 
designed to finance Canadian 
imports . of Mexican oil and 
lenders would be able to con- 
tribute funds at a. margin over 
Canadian Prime rale as well as 
EurodoHn- rates. 

Venezuela is also contemplat- 
ing -a return to the market and 
may invite tods for a 8500m to. 
$Um credit within the next two 
weeks. This would be a smaller 
operation than the recent $2.5bh l 
effort which foundered because 
of disagreement over terms. 


INTERNATIONAL BONDS 


Cautious attempt at recovery 


6 month Enro-currency interest rates 


THE INTERNATIONAL bond 
markets tried to stage a re- 
covery last -week but ended up 
in a state more akin to fragile 
convalescence. ... 

In the background was a 
decline in short-term interest 
rates that left six-month . Euro- 
dollar deposits about a \ point 
lower on , the week at lift per 
cent The movement, was how- 
ever, erratic, with rates tending 
to harden' again on Thursday 
and Friday. - 

This saw bond markets in a 
state of renewed caution on 
Friday, particularly ahead of the 
long weekend in the U-S. which . 
will bring no guiding indications 
from the other side of the 
Atlantic today. 

- . Fixed interest dollar bands . 
gained 1| points over the week, 
bid: this incl u des a fall of about 


f a point on Friday, under- 
lining fears in. the market that 
any Incipient recovery could 
be '.stalled by a wave of new 
issues^ .. 

The two new fixed interest 
rate bonds launched last week, 
for British Columbia Hydro and 
Caisse Central® de Cooperation 
Economique,. were the first in 
this sector for. about a fort- 
night 1 and by -. Friday many 
traders were suggesting that 
the pricing loolted a little tight 
hi .a deteriorating market 

The bonds -were reported to 
be selling but slowly and were 
quoted slightly outside - their 
selling concession discount on 
Friday afternoon. • 

. The real indication of re- 
covery-net investor buying— 
did not materialise on any large 
scale last week, but neither 


were investors net sellers as 
they concentrated on swapping 
existing holdings for positions 
in better quality Issues. 

/ Once again in these days of 
volatile interest rates, floating 
rate notes asserted their posi- 
tion in the primary market 
Four were issued last week, the 
.latest on Friday being a $75m 
issue for the Bank of Ireland 
with a seven-year life margin, 
set., at a i per cent over 
six-month. London interbank 
offered rate;. 

Dents** Mark bonds rose by 
about a i point over the week as 
a whole with toe market absorb- 
ing four hew issues totalling 
DM 450m -reasonably well, al- 
though here again caution still 
prevails and the West German 
Capital Markets Sub-Committee 
decided not to set a new calen- 


dar of issues at its meeting on 
Thursday. 

Instead the borrowers already 
with a place in toe gristing un- 
completed calendar will be 
allowed to proceed with their 
Issues. This means that the 
DM 25m placement for the 
South African Post Office is ex- 
pected to be brought to the mar- 
ket by Deutsche Bank today. 

Some other issues in the calen- 
dar may yet be withdrawn so 
that German bankers axe expect- 
ing a modest new issue pro- 
gramme of around DM 225m 
before the committee's next 
meeting in mid-July. This is 
apart from a bond issue under 
consideration for toe World 
Bank. 

In Switzerland, foreign bonds 
gained a J point on the week, 
and the torn round in market 



JUNE 

1982 


conditions was such that the 
latest 7i per cent bond for the 
World BanJc was oversubscribed 
at its issue price of par. 

This partly reflects a marked 
downturn in Swiss Enrol ranc 
rates, with sis mouths finishing 
on Friday almost a point lower 
on the week at 5i per cent 


By Friday, however, priev 
advances in the secondary mar- 
ket had once again flattened out 
somewhat and dealers in Zurich 
said their market seemed a- 
la eking in directions as bond 
markets in other major centres. 

P.M. 


JAPANESE SYNDICATED LOANS 



spree exhausts half-year quota 


JAPAN’S market for long-term 
yen loans to foreign borrowers, 
which was “liberalised’* in 
mid-May to let in . all types of 
borrowers, may be international 
capitalism’s nearest equivalent 
to a Polish meat counter: there 
is no more money to lend to 
toe long queues of hungry 
borrowers. 

The yen loan syndication 
market swallowed virtually all 
of a ! six-month “ quota” on 
lending in a brief six-week 
orgy . of . loan commitmenls 
following a. Finance Ministry 
decision of May 13 to open the 
gate wider. 

Bankers estimate that real 
demand for yen loans would 
exceed toe Finance Ministry’s 


rough guideline for toe half- 
year to September 30 of 
about Y300bn-Y350 bn (|L18bn- 
$JL37bn) by more than -50 per 
cent, or by Y150bn-Y200bn. 

Banks have committed them- 
selves to about Y180bn in 
around 16 loan syndications. 
This amount is already close tD 
the half-year limit on such 
loans, considering that an 
equivalent amount should be 
reserved by banks to meet toe 
demand for buyers' . credits 
to - finance Japanese exports. 
Normally such Credits equal 
about half a bank's allocated 
overseas yen tending , btut in 
most cases are considered 
better business for the banks. 

The Finance Ministry coyly 


admits that it did not intend to 
actually “liberalise” the mar- 
ket It will not allow a dra- 
matic rise in lending to meet the 
pent up demand which it has 
helped unleash. The May an- 
nouneeznent was dearly aimed 
mostly at heading off foreign 
criticism that Japan is opening 
too slowly its financial markets 
to outside interests. With the 
Yen drastically undervalued, 
officials simply do not want to 
appear to encourage a rise in 
capital outflows. 

Nonetheless, the Finance 
Ministry's actions sparked a 
frenzy of market activity, some 
of which may be described as 
over zealous. ' Some attempts 
to win loan mandates were 


judged too aggressive, prompt- 
ing angry responses from fellow 
bankers, and stem looks from 
the authorities. 

Such competition is largely 
unavoidable in a market of 
about two dozen big banks, 100 
smaller banks, 70 foreign banks 
and six giant life insurance 
companies. 

Adjusting to the game’s new 
rules has been a problem. Until 
April banks competed to win 
“ slices ” of a big pie controlled 
by the Ministry so putting to- 
gether a syndicate was not diffi- 
cult. Now banks are free to 
drum up any number of poten- 
tial borrowers. Finding partici- 
pants has become a serious 
problem. 


The funding problem has 
been acute In at least two cases, 
involving loans to CNA, a 
French financial institution, 
and to Australia. The lead 
manager (in both cases the 
Long-Term Credit Bank of 
Japan) has apparently raised 
eyebrows among fellow banks 
by initially winning mandates 
to raise about Y20bn for each. 
This may prove to be more 
than the market will har- 
moniously absorb. The average 
ceiling for a large bank, for 
example, is said to be Y30bn in 
total for toe half-year. 

The Finance Ministry claims 
it anticipated that the new 
scheme could cause “ some 
confusion. ” 


The main problem is that tin* 
Ministry in effect created 
huge new source of potential 
demand with no serious inten- 
tion of adjusting the supply 

The market can probably ex- 
pect lending to fall in the half 
year beginning in October. 
Domestic demand for yen funds 
will be pushed up by a large 
Increase expected in govern- 
ment borrowing, caused by a 
serious shortfall in revenue. 
This in turn will reduce the 
amount for overseas lending. 

The market will most likely 
find itself selling out of good« 
very quickly early during the 
next half year as welL 


Richard C. Hanson 


Peter Montagnon 


CURRENT INTERNATIONAL BOND ISSUES 


Borrower! 


Amount 

m. 


Av. Ufa Coupon 
Maturity years % 


Price 


Lead manager 


Offer yield 

% 


Borrowers 


Amount 


US. DOLLARS 
5CIfiik$t 


m. Maturity 


Av. life 
years 


Cou 


r 


Price 


Lead manager 


Offer yi*ld 


12 


1997 


IS 


m 


100 


Den Danske Provtnkmktt 25 
Hapoanm IntLft 50 

Eodft 100 

DC Hydro! 150 

CCCEJ ' 100 


1990 

1907 

1909 

1992 

1992 


8 

5 

7 

10 

10 


Si* 

5J* 


15i 

15{ 


100 

100 

100 

99* 

100 


Bunk of Inlandft 


75 


1992 


10 


51* 


100 


Dominick and Dominick 
R. Nlvlson 10300 

SG Warburg — 

Bk. Hapoaiim (Cayman) ■— 

Danwa Sccl, SBCI — 

Deutsche Bank .15350 

Salomon Bros, Credit 
Lyonnais 15375 

Morgan Grenfell, Tnv. Bk. 


D-MARKS 

New Zealand 

100 

' 1907 5 

* * 

Commerzbank 

9.250 

Emhart Ovs. Cap. 

100 

198? 7 

* • 

BHF 

9.60! 

lADBt 

150 

1989 7 

9} 100 

Deutsche Bank 

9-750 

Akznt 

100 

1989 7 

9f 991 

Deutsche Bank 

9-601 

1 Ntt yet prised. . t Final term*. ** 

Placement, t Floating rate note. O Minimum. 

S Convertible. Note: Yields am cal 


SWISS FRANCS 

OKBt 

100 

1992 


7i 

100 

Wirtsdnfts-und Pvt*bk 

7J50 

NTTJ 

100 

1992 



*i 

991 

CS 

6-605 

BB**f 

50 

1988 

_ 

71 

100 

UBS 

7.250 

Daicel Chemical **§t 

40 

1987 



6i 

100 

UBS 

6.375 

Khz CorpȤf 

35 

1987 

— 

H 

TOO 

CS 

6375 

A bee intL Holdings**! 

40 

1988 

_ 

.7 

100 

UBS 

7.000 

Natomas Ovs. fin 

75 

1990 

— 

• 

• 

SBC 

7.750 

ECUs 

ElBt 

40 

1989 

& 

13J 

991 

KredTetbank Inti.. Soc. 








Gen. de Banque 

13.866 

GUILDERS 

EDF} 

150 

1992 

8 

Hi 

100 

ABN, Amro Bank 

11.250 


• •.'*!:«» 

<--!• stpr 


1 1 ; iVIn: 1 


\\ 

(V 1 * ■! *' 


l’ ! » 






, i , 

’*• •» 


• - ■ i- 


>1 

u. 


pOSlt* 


c 


This announcement appears as a matter of record only. 


May 1982 





PHILIPPINE PHOSPHATE FERTILIZER CORPORATION 


US DOLLARS 79,000,000 
TERM LOAN FACILITY 


Guaranteed by 

DEVELOPMENT RANK OF THE PHILIPPINES 


Lead Managed hy 

. THE BANK OF TOKYO, LTD. ; 

THE DA1-ICHI KANGYO BANK- LIMITED 1 ' THE MITSUBISHI BANK, LIMITED 


Provided by 


THE BANK OF TOKYO, LTD. , 

‘ THE DA1-1CH1 KANGYO BANK, LIMITED 
THE MITSUBISHI BANK, LIMITED 


THE LONG-TERM CREDIT BANK OF JAPAN, 
UMITED • 

THE SUMITOMO BAN£ UMITED 


THE TA1YO KOBE BANK LIMITED 
THE INDUSTRIAL BANK OF JAPAN, 

limited 

- YOKOHAMA ASIA LIMITED 


THE MITSUBISHI TRUST AND BANKING 
CORPORATION 

■ THE SUMITOMO TRUST FINANCE (H.IO 
UMITED 

■ . THE TOKA1 BANK,. LIMITED 

THE MITSUI TRUST AND BANKING 
COMPANY, LIMITED 

THE YASUDA TRUST AND BANKING 
COMPANY, UMITED 


Project development and financial Advisor to the Borrower 

: AMEX BANK UMITED 


Agent Bank 

THE BANK OF TOKYO, UD. 


JUoftheseSecim^eshwe de&n sold. TMs afnswwiceTTiGKfr a/p'pears cs © ynftttBT oprecord 07dy. 


U.S. $100,000,000 


Bank of Montreal 


14 Wh Deposit Notes Due Map 27, 1987 


MORGAN S&N USTM TEKNAHONAL UNION SANK OF SWITZERLAND (SECURITIES) LIMITED 


AMRO INTERNATIONAL LIMITED 


BANQUE NATIOmiE DE PARIS 


DEUTSCHE RANK AKTIENGESELLSCB AFT KUWAIT INVESTMENT COMPANY (SAN.) 


SALOMON BROTHERSINTERNATIONAL 


S0C1ETE GENERALS DE BANQUESA* 


SmGm WARBURG St CO.ETD. 


WOOL GUNDY LIMITED 


Jme&&198& 


inert 




-StEe 


16 


OonpaiuBs and Markets 


a iiianciai Times Monday July 5 .1982 

international capital markets and companies 






U.S. BONDS 


Apprehensive mood 
for Wall Street 


Workers at 


return to business 


Tins MARKET tot* off for «ie 
long July 4 weekend holiday on 
Ftoday night relieved to be 
getting out of Wall Street but 
as apprehensive as ever about 
the shape of filings to coma. 

Some good money supply 
n&uxer — a $ 2 .2 b n decline in M-l 
m »e latest reporting week— 
eoupJed by the feet that last 
weeks $17bn Treasury financ- 
package was not the great 
. disaster Wall Street had espec- 
helped the holiday start in 
a rel^ively festive mood. 

Wall Sheet needs alt the 
relaxation it can get, because 
business tomorrow, when the 
markets open again, is likely to 
be as bad as usual. Indeed, to 
rcanind everyone that it con- 
itoies to hold the star role hi 
the markets, the Treasury plans 
to sell $10.6bn In three six- 
nmntii bills to mo rrow. This is 
higher than the usual $9bn in 
three and six-month ran*? the 


U*®» INTEREST RATES <<ft) 

Weak to Weak to 
_ . _ , , July 2 June 25 

rad. Funds wfcly av. .. 14.78 14.35 

S-month Trmaa. bills 12.41 13.45 

«> 15.10 15.51 

30-ysar Tress, bond*... 13.85 14.14 

AAA utility 18.15 16.50 

AA industrial 15.75 IB. 00 

Source: Salomon Bros {estimates) . 

In die weak to June 23 M-1 tall £2.2 bn 
to £449 -8bn- 


Treasury auctions every week. 

Moreover, to ruib the point 
home, the Treasury is also 
planning to sell $6bn in one- 
year bills on Thursday to raise 
$2bn in fresh cash. 

The Treasury sales this week 
are a further foretaste of the 
pressures government finanring 
' needs wall put on the markets 
in the second half of this year. 
And while last week’s $17bn 
package went off better than 
expected, it still proved on 
balance very disappointing for 
the market 

The sale of short-term bills 
at the beginning of last week 
resulted in the inevitable higher 
yields, but the subsequent $4bn 
auction of four-year notes 
lifted the market’s spirits 
because of surprisingly warm 
investor reception. The four- 
year notes were sold at an 
a ver age yield of 14.96 per cent 
— the highest for such instru- 
ments since last September but 
nonetheless lower than the 15 
per cent rate the market had 
expected. 


But the last part of the pack- 
age. Involving the sale of $4bn 
of seven-yea* notes last Thurs- 
day, brought the market ba*sk 
to reality. The average yield 
on the seven-year notes rose to 
142 per cent, the highest rate 
for such .an auction since the 
beginning of the year. Investors 
again showed a distinct lack of 
enthusiasm for the notes and in 
consequence the auction sent 
bond prices felling again. 

Apart from the Treasury’s 
financing needs, the market con- 
tinues to be worried by the 
' eternal problem of what will 
the Fed do in coming weeks 
in the face of the widely ex- 
pected bulge in file money 
supply in July. 

Although the Fed Open 
Market Committee met for two 
days last week to set its money 
growth targets for the short 
term and the preliminary tan 
gets for next year, it was no 
good looking for dues in the 
overnight market last week. 
Fed funds swung widely, reflect- 
ing what Wall Street likes to 
call “mid-year aberrations.” 

Among other things, there 
was a large seasonal drain on 
reserves caused by currency 
demands for the weekend holi- 
day. But the seasonal and tech- 
nical factors distorting the mar- 
ket will start disappearing this 
week and file Fed's decisions 
at the Open Market Committee 
last week should become 
clearer. In any event, Mr Paul 
Volcken the Fed chairman, is 
expected to indicate * and ex- 
plain file new monetary targets 
when he testifies before Con- 
gress mi July 14- 

In general, the market does 
not expect any significant 
change in the Fed’s short-term 
posture— if anything; it believes 
the Fed may increase the 
current upper limit of its M-l 
target range for this year to 
take into account the distor- 
tions in the aggregate caused 
by. the inclusion of new savings 
accounts. Bnt the market also 
expects money supply growth in 
July to dictate the leeway the 
Fed will have in its operations. 

Elsewhere, the Senate 
Finance Committee approved 
on Friday a Treasury proposal 
to sell savings bonds with a 
floating rate. 


Paul Betts 


Squeeze forces countries 

into short-term borrowing^ 


BY PETER MONTAG NON. EUROMARKETS CORRESPONDENT 


FRESH evidence of a squeeze 
on international bank lending 
has emerged with latest figures 
from the Bank for International 
Settlements. 

The figures point clearly 
to an increased reliance by 
developing countries, particu- 
larly in T^tin America, and 
Eastern Europe on short-term 
loans maturing in one year or 
less. 

During the second half of 
last year many countries were 
also unable to increase their 
stock of undrawn loan commit- 
ments which could be used to 
meet financing requirements in 
1982. 

Short-term bank borrowing by 
Latin American countries rose 
by $112bn to $91.4bn during 
toe second half of last year 
while undrawn loan commit- 
ments fell by $4 97m to $28.2ba. 

The bank, which is a leading 
monitor of international bank- 
ing flows, also reported that 
short-term borrowing by East 
European countries rose by 
$22bn to $25.6bn while undrawn 
loan committments fell by 
$554m to $7.1bn during the same 
period. 

The figures are based on re- 
ports from international banks 
based in the Group of Ten lead- 


BORROWING FROM INTERNATIONAL BANKS BY COUNTRY 

(5m) at December 31. 1981 


Total 

Doe in 

1 year 

Due in Due after 
2 years 2 years 

Undrawn 
commit- 
Unallocated ments 

Argentina 

24^44 

11,561 

2,965 

9.498 

820 

3539- 

Brazil 

52,717 

18330 

4309 

25,009 

Sfitl9 

6,109 

Mexico 

56,937 

27.656 

4372 

22A17 

1392 

7328 

Poland 

15,283 

5322 

1399 

5310 

2552 

1377 

Hungary 

7,897 

3,113 

555 

3,459 

570 

353 

Yugoslavia 

10,700 

iftTC 

879 

5,091 

1,755 

1373 

S. Korea 

19,907 

21334 

1321 

6^49 

503 

4,145 

Philippines 

10,204 

5,764 

460 

3306 

274 

2513 


ing industrial countries and 
Switzerland. Ireland Austria 
and Denmark as well as leading 
offshore banking centres. 

They show there was a 
general trend towards Shorter 
term bank lending in the 
second half of last year, affect- 
ing even developed countries 
outside the bank's reporting 
area. These countries saw the 
share of medium-term finance 
in their new bank borrowings 
drop to 39.6 per cent in the 
second half of 1981 from 43.6 
per cent in the previous sis 


months. 

Tbe developed nations group, 
which includes countries such as 
Australia. Greece. Spain and 
Yugoslavia, also suffered a 
slight reduction in their un- 
drawn loan commitments. 

By contrast. Far Eastern bor- 
rowers, which have been courted 
by banks because of their 
strong economic growth rates, 
managed to notch up an addi- 
tional SL4bn in unused loan 
commitments, although they too 
found medium-term finance 
harder to obtain. 


By Richard Mackie in Toronto 


WORKERS AT Inco, the 
world’s largest nickel pro- 
ducer, have voted over- 
whelmingly to end their 32- 
day strike. They will go on un- 
employment Insurance, how- 
ever, Instead of back to work 
because the company has 
extended its annual summer 
shutdown for an additional 
five weeks until October 3 
because of falling demand. 

About 80 per cent of the 
votes cast favoured ending 
the strike by members of the 
United Steelworkers of 
America. The offer accepted 
was almost identical to the 
one that 72 per cent of local 
members voted had rejected 
a month earlier. 

-The new contract will be 
for three years with a full 
cost of living allowance but 
without an Increase in the 
current hourly wage rate. 
However, if the inflation rate , 
remains near its current level 
of 11.8 per cent for the life 
of the. contract the hourly 
rate would climb to C$16.06 
(U.S.S12.40) from the present 
C$11.54, well above the 6 and 
5 per cent guidelines sought 
by the Federal Government 


France sets up key 
machine tools group 


BY TERRY DOOSWORW IN PAWS 


FRENCH state-owned com* 
panies will be the main share- 
holders in a holding group being 
set up as part of the reorgani- 
sation of the country's stricken 
machine tool industry. 

The group, created after six 
months of intensive negotia- 
tions led by the Industry 
Ministry, will take over a num- 
ber of ’ private machine tool 
companies. These activities are 
then to be split into two main 
operating concerns specialising 
in milling and turning. 

Virtually all the companies 
being absorbed by the holding 
operation, to be called Machine 
Fraincaise Lourde (MFL). are 
in financial trouble. The terms 
on which they are being merged 
have not been disclosed, but the 
Ministry said that MFL wifi 
have a capital of FFr 250m 
(S37m>. and that there will be 
some job losses. 

In December of last year, the 
Ministry announced sweeping 
plans for revitalising the .sector 
through a mixture of investment 
aid. new central purchasing 
plans and the restructuring of 
manufacturing. A total of about 
FFr 4bn was set aside for the 
project 

With much of the industry m 


losses, however, it has proved 
difficult to find strong companies 
around which the regrouping 
could be planned. Hence, the 
emergence of the nationalised 
companies to lend weight to 
MFU 

The leading shareholder is to 
he the Tnstitut de Dcvetoppe. 
moot Industrie! {TDD. a gov- 
ernmenf-backed agency which 
frequently entervenes to help 
companies. 

im will have 35 per rent or 
MFL. with the rest being shared 
hv nine other companies— 
SN'ECMA {aero engines. 
SNIAS (aerospace). Dassault 
i aerospace). Sacilor (steel), 
Usinor (steel), Crcusot-Loire 
(enginecrinc). Alsthom-Atlan- 
tioue (electrical plant). Renault 
(motors). Peugeot (motors). Of 
these, only Peugeot and 
Creusnt IiOirc. a subsidiary of 
ihe Empain Schneider group, 
are private. All the rest are 
either fully nationalised or con- 
trolled bv the state. 

tfFl/s mining subsidiary will 
he formed front two companies. 
Albert. which belongs ta the 
Line erouo. and Capdenac, cur- 
rently nnrt of Tin. The turn- 
ing division will take over Saint 
Etienne Machines Outils and the 
Berthiez plant at Givers. 


INTERNATIONAL APPOINTMENTS 


ESAB makes 
changes in 
subsidiaries’ 
top posts 


Consolidating ESAB’s pur- 
chase of Hancock GmbH from 
BOC at the end of 1981 and com- 
bining it with its gas-cutting divi- 
sion in Karben near Frankfurt, 
into a company named ESAB- 
HANCOCK, Mr Horst Peters, 
formerly sales manager of 
ESAB, gas-cutting machines, has 
been appointed managing direc- 
tor. 

ESAB has also appointed Dr 
Peter Jarl, formerly managing 
director of ESAB International 
in Gothenburg, to be managing 
director of ESAB. Solingen. 

Mr Lars Brodd, formerly with 
ESAB International on the sales 
side has been appointed manag- 
ing director of the recently 
established company ESAB 
Middle East In Dubai. 

Mr Rnstan Bergman, formerly 
a director on ESAB group man- 
agement has been appointed 


managing director of ESAB 
lb erica, Madrid. 

Mr John Forsetl, group per- 
sonnel director has been also 
appointed secretary on the ESAB 
group, management board of 
directors. 

• Mr' Frank J. Hannah, publicity 
manager at ESAB, GiHingham, 
Kent, returns to Sweden as inter- 
national public relations manager 
at ESAB group headquarters in 
Gothenburg. 


• Dr Hartwig Bartels has joined 
the managing board ' of NAT- 
IONAL WESTMINSTER BANK’S 
wholly-owned German subsidiary 
Deutsche Westminster Bank. He 
has served with Chase Man- 
hattan Bank in Germany for 16 
years, most recently as manag- 
ing director of Chase Bank in 
Frankfurt Deutsche Westminster 
Bank opened in Frankfurt in ' 
January following tbe merger of 
National Westminster opera- 
tions in Germany. 

• Mr William H. King has been 
appointed managing director of 
DEUTSCHE MARATHON PET- 
ROLEUM in Munich. He is suc- 
ceeding Hr H. Donald Dobe who 
returns to the domestic organ- 



Mr William H. King 


isation of Marathon Oil Com- 
pany, as manager of the Illinois 
refining division. Mr King was 
manager of the Michigan refin- 
ing division in Detroit Deutsche 
Marathon is a shareholder of 
Deutsche Transalpine OeUeitung 
and of Petroliber in Spain. Mara- 
thon Oil Company is a wholly- 


owned subsidiary of United 
States Steel Corporation. 

• At BANK OF LONDON AND 
SOUTH AMERICA <a Lloyds 
Bank subsidiary) the following 
executives have been appointed 
to the board: Mr P. J. Barca u, 
general manager, Brazil; Mr 
J. E. A. Field, chief manager, 
Spain; Hr A. G. G. McWtlliara, 
general manager. River Plate cir- 
cuit and Mr J. R. Turley, execu- 
tive vice president and general 
manager. North America divi- 
sion. New York. At LLOYDS 
BANK INTERNATIONAL 
(FRANCE) Hr P. M. R. 
d’Adhemar, chief manager, 
France, has been appointed to 
the board and Mr E. A. Allan 
has resigned from the board on 
his appointment as chief inspec- 
tor, Lloyds Bank International. 

• FAIRCHILD SWEARINGEN 
CORP 1ms appointed Mr Alan B. 
Kehlet as president. He was 
formerly president of Rockwell 
International's Sab reliner divi- 
sion. 

• Mr Michael P. Fenton has 
joined TECHNICOLOR AUDIO- 
VISUAL as vice president, 
finance. 


• Ms Hanna Holbom Gray, pre- 
sident of the University of 
Chicago, has been appointed to 
the board of the ATLANTIC 
RICHFIELD COMPANY, becom- 
ing its first woman director. 

• MASSEY - FERGUSON. 
Toronto, has appointed Mr Robin 
H. Warx wider as a director. He 
is c hair man and chief executive 
of Bain Dawes, London, and a 
director of Massey- Ferguson 
Holdings, a holding company In 
the UK. 

• Dr Herbert Culm an n, who had 
been chairman of the LUFTH- 
ANSA executive board for almost 
ten years, has handed over the 
post to his successor, Mr Heinz 
Rnhnau. former State Secretary 
in the West German Transport 
Ministry. Since April 1. Mr 
Ruhnau had been deputy chair- 
man of the airline’s executive 
board. This position has been 
taken by Mr Reinhardt Abra- 
ham, who has been on the exe- 
cutive board since 1972 as mem- 
ber responsible for technical 
matters: his responsibility for 
this area continues. 

• NATIONAL WESTMINSTER 
BANK has established a group 


mining and metals office in New 
York. Staffed by personnel 
drawn from NatWest and Its 
wholly-owned subsidiary. Nat- 
ional Bank of North America, the 
office is under the direction of 
Mr Alistair Beeston. who has 
been appointed senior vice pre- 
sident. He was formerly a 
manager in the hank's London- 
based global energy unit. Other 
appointments include Mr Garv 
Ranch and Mr Nick Sown, both 
vice presidents, and Mr Ian Scur- 
field, assistant vice president. Mr 
Rauch has been seconded from 
Nslionai Bank of North America. 
New York, and Mr Sown and Mr 
Seurflehl were in NatWeot's min- 
ing and metals unit in London. 

« The SOUTH AFRICAN 
CHAMBER OF MINES has 
elected Hr William Sfalan, 
AnglovaaL technical director, as 
president in succession to Mr 
Lynne Von Den Beech. Mr Cotin 
Fenton, head of Gold Fields of 
South Africa gold division, and 
Mr George Ntsbet, Johannesburg 
Consolidated Investment Com- 
pany gold and uranium division 
chairman, were elected vice- 
presidents. 


You solve ft... 


White plays and mates in 3 moves. 



We solve it...howto make the 
right move in export finance 




Creditanstalt’s London branch has added, 
something special to an already highly sophisticated 
banking community. 

Particular expertise in export finance (in Austria, 
we handle 40% of affexportfinance business) has 
been the key to our growth. 

Forfaiting, subsidised finance, counter- 
purchase or barter, and project lending services have 
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With ourforfaiting service.for instance, we can 


take ttie riskoutofyour export contracts, improving 
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Our London branch can also offeryouafulf 
range of banking products, including highly efficient 
foreign exchange services and treasury operations. 

Nexttimeyou need in-depth export finance 
experience (and for the answer to the chess problem) 
contact Creditanstalt 


CREDITANSTALT 

Austria's leading international bank 


CrecfflanStett-BankvBfein- London Branch: 29 Gresham Street London EC2V TAH.Tetepbone; 01-726 45 tl.Tetex: 894 612. 
Head Office: Schottengasse 6 , A -1010 ViennaTelephone; (D 222 ) 6622 - 250 O.Telax: 133030 - 


FT INTERNATIONAL BOND SERVICE 


150 

200 

100 

100 

200 

50 


U.S. DOLLAR 

STRAIGHTS Inwd 

Aetna Lita 15 86/97 ... 150 
Amax Int. Fin. 10V 92 75 

Amex O/S Rn. 14V 89 75 

APS Fin. Co. 16V 89 ... 75 

ATT 14V 89 400 

Baker fnt. Rn. 0.0 32 225 
BHP Finance "14V 88 ... 

Bk. Amar. NT SA 12 87 
Bk. Montreal 14V 87 ... 

Bque. Indo Suez 15 89 
British Col. Hyd. 144 89 
Burroughs ini. 15V 88 

Canada 14V 87 750 

Canadair 15V 87 ISO 

Canadian Pac- 14V 92 75 

Carolina Power 16V 89 60 

CISC 16 87 100 

Citicorp O/S 15 84/92 100 
Citicorp O/S 15V 85/97 125 

CNA 15V 97 75 

Con. Illinois 15V 89 ... 100 
Duke Pwr. O/S 15V 89 80 

Dupont O/S Cap. 0.0 90 300 

TCSC 14V 87 50 

EIB 15V 89 150 

EksportRnana 14V 89 ... .50 
Gan. Elec. Credit 0.0 92 400 
Gen. Elec. Credit 0.0 93 
Getty Oil Int. 14 89 ... 

GMAC O/S Fin. 16 88 

GMAC O/S 15V 85/97 

GMAC O/S Rn. 15 89 

GMAC O/S Rn. 15 87 

Gulf Canada Lid 14V 92 


Chari geoii 


Bid! Offer day week Yield 
+ 1V +2V14A4 


400 

IS 

150 

100 

125 

100 

100 


Gulf Oil 14V 94 175 


Gulf Oil Fm. 0.0 92 
Gull States O/S 18 90 
Int-Am. D*. Bk. 15V 87 
Japan Dev. Bk. 15V 87 
New Brunswick 16V 89 
Ontario Hydra 14V 89... 

Pac. Gas ft B. 15V 89 
Phillies Patrol 14 89 ... 

RJ. Rynlds. O/S 0.0 92 
Saskatchewan 16 89 ... 

Shell Canada 14V 92 ... 

Spain 15V 87 100 

Superior O/S Fm. 14 89 125 
Swed. Exp. Cr. 15V 89 
Swad. Exp. Cr. 14V 90 
Swed. Exp. Cr. 0.0 94 
Texas Eastern 15V 89... 
Union Catbide 14V 69 
Wefls Fargo f. F. f5 87 
World Bank -15V 88 ... 
World Bank -14V 87— 


300 

60 

55 

60 

76 

150 

45 

200 

400 

IS 

IS 


ion 

100 

200 

60 

150 

75 

2SO 

600 


101V 107V 
97V 97V -0V+1V 16.74 
94 S4V +0V +0V 15.64 
99V 100V 0 "MV 16.21 
WIV 102V +0V +14 13.73 
tZS 26V +CV +t 14*7 
• 94V 95V -0V +1 16.00 
89V 90 +0V+1V 15.12 
95V 96V +0V +1V 16.70 
94V 85V -0V +1416*0 
96V 97V +0V +1V 15.49 
99V »V 0 +1V 15.79 
96V 97V -0V +0V 16.31 
99V 99V -QV +0V 15.55 
94V 95 0 +1 16.89 

100V 100V -0V +2V 16.30 
100V 100V +0V +1V 15.73 
99V KWV +0V + IV 14.88 
99V 100V +0V +1V 15-32 
95V 9BV 0 +0V 18J57 
99V 99V -HJV +0V 15.78 
94V 95V -OV -0V 16.77 
34V 35V -0V +1V 14-85 
96V 96V -0V +1V 15.75 
98V 99V -0V +1V 15.66 
96 954 +14 +2V 16JM 

Z7V 28V 0 +1V 14.19 

24 24V 0 +1414*6 

96V 97V +1V +ZV 14.72 
99V 100V -04 +1V 15.96 
88V 99V +0V +1416.89 
96V 96V 0 +1415*4 

97V 98V +0V + IV 15.54 
95 95V +0V +1V 15.69 

97V 98 +0V +1V 14.83 
27V Z7V +0V +14 1434 
96V 98V -0V +1V 16.82 
96V 96V +04 +0V 16.09 
101V 101V 0 +1 14.81 
100V 101V +0V +2V 15.93 
96V 97V +0V +1V 15.42 
99V 100V -0V +1V 16.42 
94V 94V +04 +1415.32 
28V 274 +04 +2V 14*1 
100V WIV +0V '+iv 15.86 . 
95V 85V +14 +14 15.24 
99V -04 +0V 15.92 
94V +14 + 2415*5 
97V -04 -04 15.79 
934 94V -0V +04 16.15 
19V 20 -04 +14 14J89 
101V 101V +04 +2 15.38 
96V 97V +14 +24 15.42 
97V 984 +04 +14 1BX2: 
67V 984 +04 +1 16.70 
95V 86V +04 +14 15.80 


93V 

97V 


Average price changes .. On day +04 on week +1V 


DEUTSCHE MARK 
STRAIGHTS 
Asian Dev. Bank 9V 92 150 

Australia 9V 91 300 

Australia SV 91 200 

Austria 8V 92 100 

Barclays O/S In. 8V 94 100 

Canada 8V 89 200 

Comp. Tel. Esp. 104 92 100 
Cred. Fonder 8V 92 ... 100 

Denmark 10 88 100 

Denmark 10V 92 10O 

TDF 9V 93 100 

EEC 9V 94 200 

EIB 84 92 100 

int.-Am. Dev. Bk. 9 92 150 
Ireland 104 86 100 

Necnl. Fin and ora 11 30 150 

Philip Morns 84 90 ... 100 

Quebec 10V 92 150 

Renfe 10 92 100 

SNCF 8V 92 100 

Tauemautobahn 9 T « 94 SO 

World Bank 9V 89 100. 

World Bank 8V 92 . .. 200 


Chang e on 

issued Bid Offer day week Yield 
98V 99V -04 +OV 9.40 
102V W3V -04 +04 8*2 
103 108V -04 +04 8.78 
95 954 -04 +04 9.12 

95V SSV+0V+1V 8.95 
1014 101V +04 +04 8.20 
101 101V +04 +04 10*7 
96V 96V-OV+OV 9*8 
101V 102V +OV +04 9J53 
102V 103V +04 +0V 9.64 
1004 1004 0 +04 9.78 : 

1014 10IZV 0 +0V 9.42 ' 
95 95V O +0V 9.12 

97V 984 -04 0 a .35 

101V 1024 -04 +14 9.49 
964 97 O. +04 TIA4 
99V 100V -04 +04 8-24 
WZV 103V +OV.+OV 9.68 
100 100V+04 +1V 9.95 
■96V 98V -04 +14 9J3 
101V W2 -0V +04 9.69 
1004 1014 +04 +04 9.28 
95V 96V 0 +1V 9.17 


Average price changes... On dsy 0 on weak +04 


SWISS FRANC 
STRAIGHTS 
Air Canada 6V 92 ... 
Asian Dev. Bank 7 92... 

Aucalsa 7V 92 

Australia 6V 84 

Cse. Nat. TEnergie 7 92 
CFE-Mexico 8V 92 .. . 
Co-op. Denmark 8V 32 
Crown Zellrch. 6V 92 
Europerat 7V 92 . . .. 

Ind. Fund Finland 6V 92 
Japan Dev Bank 6 94. .. 

Kobe City 94 92. 

Kommufllene 7V 92 ... 
Mitsui OSK 64 92 .. . 
National Pwr. Co. 8 92 
New Zealand 6 92 . . 

OKB 7V 92 

Ost. Postspar 7 V 92 
Philip Morris 64 92 ... 
Philip Morris 6V 94 ... 

Quebec 74 92 

Renta 7V 92 

Sckiaui Pre. 5V 92 WW 
Soc. Lux. de Cnt. 8V 92 
Tlroler Waasqr 6V 92- 
Vorarlberg Kraft 6V 92 


Change on 

Issued Bid Offer day week Yield 
100 '1004 101 -04 -04 6.13 

100 >01 101V +04 +0V 6.84 

80 96V 96V -0V -0V 8.30 

100 -. 104V 104V -04 +14 5 .95 
100 ■ 1014 WIV +04 +OV 6-80 
■97 974 -04 +04 8X9 

IQVi 104 -O4 +O4 7 AO 
1004 101V +04 +3 6.90 

100V MOV -04 +OV 7.16 
99V 984 0 +04 6.98 

99V 99V tOV -04 GAS 
1004 100V -04- +14 6 04 
1004 100V -04 0 7.15 

100 100V +04 -MV 6.44 
103 1034 -04 -04 7.62 , 

101 . W14 -04 +TV 5.83 
10* 104V -04 +OV 7,14 
1024 W2V O-D 7.11 
102V 1034 -04+04 6 JO 
1tH4 W14 -64 +04 6.06 
1064 105** +04 +04 6.80 

97 97V 0 -04 8.18 

103V WOV +04 -IV 5J2 
106V 106V -04 -IV 7.19 
964 96V 0" -04 8.72 
103 103V -04 +04 6 J1 


60 ' 
' 25 ' 
106 
100 
30 
100 
100 
35 
100 


100 

10D 

100 

1 » 

100 

100 

80 

70 

80 

100 

90 


Average price changes. On dsy -04 oh week +04 


Change on 

YEN STRAIGHTS Issued Bid Offer day week Yield 

EIB 84 92 15 97 97V 0 +04 8.66 

Int. -Amor. Dev. 84 91 IS WIV 1024 +04 +04 8.56 
Japan Airlines 74 87... 9 95V 954 +04 +0V 9A6 

New Zealand 84 87 15 994 1004 0 0 8.47 

World Bank 8V 92- » 98V 99V +04 +04 8.52 

Average price chenges... On day +04 on week +04 

Change on 

OTHER STRAIGHTS Issued Bid Offer day week Yield 

Ball Canada 16 89 «... 100 197 97V +04 +14 16.64 

Can. Pac. S. 164 89 CS SO t974 97V +04 +0416J7 

Crd. Fonctor 174 SB « 30 W. 394 +04 +04 17.34 

Gaz Metro. 17V 90 « 20 1984 98V +04 +0V 18.02 

OKB 16V 88 C*. 63 t96V 97V +1 +2V 17J» 

Q. Hyd. 16V 89 (My) CS « 199 99V 0 +04 16.68 

Quebec Prov. 16V 89 CS 60 t994 99V +04 +14 16.57 

U. Bk. Nwy. 94 90 EUA 18 90V 92 -04 +0V 11.21 

Amro Bank 10 87 FI,.. 150 98V 994 +04 +04 10.25 

Bk. Mees ft H. 10 87 FI 75 97V 984 -04 -04 10.56 

Eurafima 104 89 R 60 *94 99V -04 -04 10.61 

Ireland 104 87 FI 75 974 98 0 +04 11.07 

Phil. Lamps 104 87 R... 100 99V 99V -04 +04 10.33 

World Bank 10 87 FI... 150 97V 984 -0V +04 10.57 

OKB 14 86 FFr. 400 9ZV 934 +04 -04 16 J3 

Solvay « C. 14V 86 FFr 200 92 33 0 -04 17.58 

Beneficial 14V 90 E (D) 20 . 87V 88V 0 0 16.93 

BNP 134 91 £- 15 93V 94V +0V +0V 14.78 

CECA 134 88 E. 20 944 954 0 '+01,14.78 

fin. Ex. Cred. 13V 88 E 15 984 974 +04 +04 14.98 

Gan. Elec. Co. 12V 88 £ 60 924 934 +04 +04 14^5 

Hiram Walkpr 1*4 86 E 25 . 97V 884 +04 +04 1493 

Norsk Hydro. 144 87 £ 30 864 994 0 +04 14.80 

Privatbankan 14V 88 £ 12 95V 96V -04 +0V 15.51 

■Quebec 154 87-E...r...:. J 35 - 1014 1024 0 0 1494 

Reed (Nd) NV 16V 89 £ 26 1034 10«V -04 +04 15.64 

Royal Trustee 14 88 £ .. 12 38 98 +04 +04 14.48 

SDR Franca 154 92 £... 30 994 1004 0 +0V 15*45 

Swed. Ex. Cr. 13V 86 £ 20 97 88 0 +0V 14.60 

Eurafima 104 87 LuxFr 500 95V 96V 0 +1411.58 

EIB 9V 88 LuxFr ;; 600 92V 93V 0 +1411.42 

FLOATING RATE 

NOTES Spread Bid Offer C.dte C.cpn C,y]d 

Allied irlah BV 92 04 98 984 15/10 15.69 15.97 

Bk. ol Tokyo 5V 91 (D) 04 88V 994 8/12 15V 15,42 

Bk. Nova Scotia 5V 93 04 98V 994 29/10 164 IE JO 

BFCE 5V 88 04 96V 894 28/10 15 I5.I6 

BFCE 5V 87 04 99V 99V 27/7 16V 16 J1 

BNP 5V 89 WW OV 98V 96V 6/11 16.19 75.42 

Calsss Nat Tele. 5V 90 04 99 994 21/10 1SV 15,87 

CCCE 5V 2002 OV 884 98V 11/12 15V 15.81 

CEPME 5V 92 04 88V 99V 10/12 16A4 15.57 

Chemical NY 5V 94. *04 99 98V 23/9 18.89 78.91 

Cont. llllnoia 5V 94...... «V 984 99V 24/9 16V 1BJ4 

Credit Agricole 5V 97... 04 98V 994 24/9 15.44 15 .57 

Credit du Nord 54 92 04 961. 994 23/12 16*1 10.96 ■ 

Credit Lyonnais 5V 97... 04 99 994 1/10 18 18.12 

Credit Net. 5V 94 *04 984 984 9/9 14359 14.91 

Denmark. Kngdm. of 92 OV, f99 994 2S/8 15.44 15.57 

1 ret and 5489/94 04 798 98V 25/11 144 15.01 

Kansallia .Oaaka 5V 92 04 98V 994 6/11 15 Ol 15.49 

Uoyds Eurofin 54 93... §04 98V 99V 29/W 174 17.28 

Ujng Term Cred. 64 92 04 98 984 29/11 1*4 14.89 

J P Morgan 54 97 ... 504 98* 99412/8 144 14.77 

Nat Waal. Rn-BVSI... §04 394 99415/7 15.19 15.26 

New Zealand 54. 87^.... OV 99 &9V 7/10 15.56 15.68 

Nippon Credit 54 90 04 994 99V 10/8 16.06 16.16 

Offshore Mining 54 91 04 88V 994 2/12 74,19 14 JB 

K nk i n . S . 9 «« 04 99 99V 17/12 1BS1 16.83 

Scotland Int. 54 92.. — 04 38V 99 23/9 154 15.57 

Sec. Pa«flcS4 91.._ K W. 99V Will! 15,17 
Soaere Generate 54 95 04 99 99V 1/9 1BJ1 T5A3 

Standard Chart. 54 9l OV 98V . 99 16/11 WV 16.06 

Sweden 54 89 ......... 04 994 39V 28/8 15.31 16.41 

Toronto Domin n 54 92 04 96V 99411/8 16V 1BJS2 

. Avenge price changes. .. On day 0 on week +0V 

CONVERTIBLE Cnv. Cnv. Cbg. 

BO™® _ „ data price Bid Offer day Pram 

Ajinomoto 54 86 7/81 333 81 82V -1 ZJU 

8ow Valley. In*. 8 95 4/81 23.12 964 97 -24 67 M 

Bridgestone Tire 5V 96 3/82 470 82V 644 -IV -2.23 

Canon 7 B7_ 7/82748.2 89V 91 -14 0.40 

Canon 6V 95 1/81 829 83 85 -2 igna 

Chugal Pharm 74 96 ... 7/82709.6 96V 98 -IV iS 

Fujitsu Fanuc ..10/81 5541 - 794 81* -14- 12.0 

Furokawa Ree. 54 96 7/81 300 804 82 -IV -7.38 

Hsnsoir O/S Fm. 94 98 8/81 *78 79 - 9 _l 7 ^g 

Hitachi Coble 54 96 2/82 516 81V 83 -2V 

Hitachi Cred. Cpn 5 96 7/81 16T2 74V 79 -OV 13.45 

Honda Motor 5V 97 3/82 841 814 83 -OV 

Kawasaki 5V 96 9/81 229 62V 64 -OV HS3 

Marti! 6 96 7/81 846.4 94 95V -OV -0S8 

Minolta Camera 5 96 .10/81 828.4 BOV 62 -04 32.99 
Mlnorao 94 97 5/82 8.16 +77 79 +1 3 sjm 

V& *■« Wk MV —IV X5 

NKK 67 . «••«. 7/H .,188 . BB*a 70 7 b ia 

Nippon Chemi-C. 5 91... -10/81 913 n o 
Nippon Saceric 54 97... 2/82 846 83V 85V -24 

Orient Finance 54 97 ... 3/82 1205 844 864 —04 

Sanyo Electric 5 98.:.,. .10/81 ^ 04 644 line 

SuInftOirro Bee, gs 97... 3/82 577.3 S04 824-24 *71 

Sumitomo Mar. 5V 96... 10/81 29B.T arV 63 -nr! ec'22 
SwhraBk.Cpn 84»... 9/80 181 714 73V f M 

KonlahirolUJ 600 DM ... 2/82 Gas **10041014 -14 eal 
Mteufabhl H. 6 89 DM 2/62 2S3 *804 90V -OV 


©■tits Financial Tima* Ltd. 1082 Raproduct.on in wh»i- 
or In part in any form not permitted without wrifun 
conssni. Date supplied by DATASTREam letermtSli. 


EUROBOND TURNOVER 

(nominal value In $ml 



Cedel 

Euro- 

dear 

U-S. $ bonds 
Last week 

5,083-9 

7,896.6 

Previous week 

8,473.3 

8,062.7 

Other bonds 
Last week 

726.4 

651.7 

Previous week 

767.1 

SXU 


* No information available— 
previous dai*'s price. 


t Only one market maker 
supplied a price. 


s STRAIGHT BONDS: The yield 
is the yield to redemption of 
the mid-price; the amount issued 
is in millions of currency units 
except for Yen bonds where 
it is in billions. Change on 
week— Change over price a week 
earlier. 


FLOATING RATE NOTES: 
Denominated in dollars unless 
otherwise indicated. Coupon 
shown is minimum. C.dte=:Date 
next coupon becomes effective. 
Spread = Margin above six-month 
offered rate (t three- month ; 
3 above mean rate) for U.S. 
dollars. C.cpn — The current 
coupon. C.yld.=The current 
yield. 


CONVERTIBLE BONDS- De- 
nominated in dollars unless 
otherwise indicated. Chg. day= 
Change on day. Cnv. date=First 
date for conversion into shares. 
Cnv. price = Nominal amount of 
bond per share expressed in 
currency of share at conversion 
rate fixed at issue. Prem= Per- 
centage premium of the current 
effective price of acquiring 
shares via the bond over the 
most recent price of the shares. 


The list shows the 200 latest 
international bonds for wbich 
an adequate secondary market 
exists. The prices over the past 
week were supplied by: Kredict- 
bank NV; Credit Commercial de 
France: Credit Lyonnais; Com- 
merzbank AG; Deutsche Bank 
AG; Westdeutsche Londesbank 
Girozontrale; Banquc Generate 
du Luxembourg SA: Banque 
Internationale Luxembourg; 
Krcdiecbank Luxembourg; 
Algemene Bank Nederland NV; 
Pierson, Heldring and Pierson: 
Credit Suisse/Swiss Credit Bart: 
Union Bank of Switzerland.' 
Akroyd and Smithere; Bank 
of Tokyo International; Barters 
Trust International; Chase Man- 
hattan; Citicorp International 
Bank; Credit Commercial de 
France (Securities) London; 
Datura Europe NV; Deltec 
Sororities (UK); BBC; First 
Chicago; Goldman Sadis Inter- 
national Corporation; HaxnbroR 
Bank; IBJ International; Kidder 
Peabody International; Merrill 
Lynch; Morgan Stanley Inter* 
national: Nikko Securities Com- 
pany (Europe); Orion 
Bank; Samuel Montagu and ctu 
Scandinavian Bank; Soc id® 
General e Strauss Turnbull; 
Snmitomo Finance XnternaUotuHj 
S. G. Warburg and Co.; Wood 
Gundy. 


Closing Price* on Ju*J * 



••••• 




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grou 


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. . Ji* 


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•I x 


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•■•■Si. 

• V 


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"■ ’ •' i-t 
1 Tli- 

' ’ ' I *• 


Kn» t 

• • ’I" Lid »■ 


\ ‘ '.i . .. . . 

' ‘ • r&. 


1- 1. \1- 



Financial Times Monday July 5 1982 

INSURANCE -.TrV;;;^' 




review 


BY JOHN MQOfS, CITY COftfiESFONDQiff 


House of Lords committee into m-- -rtmiviK^ir^* - Mril » LJ .u J « 
reviewing the Uowr«TRiii aH. ?“**«*** aRwiey. A 

imnro^ -assoc finds new 


' ‘‘A 


,.*~.improvS* the lZtJ. JZz “““Pw. 1 agent finds new 

ma ^~ m *rabers lor . Lloyd's, .manages- 
i3 “ nn J ee i -£* art ■ ' JntroduS. 

forward to i» *> .tmtermtetag- trail- 


•, - § v 
1 1 1 1 


0 ksssrjs. 

P-" - ' a anges ‘ '-- to own.znenDjbere' agencies after' 

or -f. controversial -clause, re- divestm ent, 

‘I]*™! ^oyd’s brokers to sell AcconHng: to Lloyds’itis 
- off their shareholding links with. Possible that some agencies will 1 
■**» ;. ruwenmtmg agencies in five Split The tomaenw j8»bcy- 
w.RB because of conflicts o£ ’ 


n'n "interest, still remain in the body 
<tI?, of the legislation. The clause, 
which is apposed by many 
in brokers, is unlifceiy to be 
,r*-. .amended. 

—*■- ~The central problem now for 
•<«/*■ the brokers is rotating 'their 
- ? * u . managing agencies which have 
.•V-'-to be sold. :■ 

: r . Lloyd’s estimated chat m 
of a total of 198 Lloyd’s 
managing agencies, the groups 
Jjl • which run -uayderwcitaiQg gyn- 
rr dicates at Lloyd’s wiffl be 
^.affected. Of the 114, there are- 
B* groups where 5<k per cent or 
nmre of liie issued share capftnl 
‘ is 1 controlled toy Lloyd's broking 
.. . . interests. . 

. ...The paritementary Tequire- 
‘ mem for <^yts*um?rtf may be 
met by fee agency disposing of 


-i»i 


may be -arid to rarjgrtrmg inde- 
pendent nwHweing agendas or 
toe members of Lloyd’s or other 
purchasers. 

The main factors witidtwifl 
influence -valootaon are: - the- 
number of members for whom, 
ate agency acts;., the agency 
profit' ami the agency income. 

-Lloyd’s officials think the most 
appropriate M broad brash 
baste for a valuation would be 
to apply a. muitapUer of five to 
six times the agency 1 ^ pre-tax 
profits. . 

lhe 114 agents has net pre- 
tax profits. of abdut £17m. : Even- 
allowing for .management 
charges , payable tp other com? 
pauses Uoyjd’s says it. is 1221- 
IStely that the profits wonM he 
more than £20m. 

Taking the factor of six times 
pretax profits, the total, valna- 

C 1 rm - - 


„ 73 ■ . — : -— o-~--w — e, tiiwo, me iDHi. Twna- 

r tne managgiug agency franctaon s tion is £120m. This estimate of 
— that is. the -rieht to run svn- _ £l 20 m • wnrecmite a nnocrkla 


"that is, the Tight to run syn- _ £12 Om represents a possible 
d^cates— and convecting itself price of disposing of all shares 


9u.' 


in all" agencies which have 
divestment problem. Lloyd's 
says it would not be unreason- 
able to discount the £l20m by, 
say.HO per .cent to reflect those 
cases where the share disposal 
will represent a minority hold- 
ing. This would bring the 
overall figure down to £96m. 

Lloyd’s has observed that the 
method of separating members’ 
agents from managing func- 
tions may vary. It has been 
told that the overall agency 
valuation divides roughly, in 
ha l f . It- .has also been told 
that some members’ agencies 

are valued on the basis of £5,000 

per member. 

The 114 agencies act for about 

12$ 00 members which would 
give f 60 m, half of the £12 0m 
total valuation. 

Lloyd’s has concluded that if 
no members’ agency, functions 
are retained by the broker, the 
total amount realised in a sale 
would be £96m- If all the mem- 
bers' agency functions are re- 
tained :by the broker, about 
£48m could be gained from the 
disposal of managing agents. If 
the final 'approach to divest- 
ment varies in any way from 
those alternatives, Lloyd’s 
reckons that brokers could 

receive £50m-£70m in the 
eventual sale. 


This week in Parliament 


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a<ir . 


TODAY 

.- Commons: ■- Private members’ 
motions until 7 pm. FoBanved 
by- debate <m a Jj^berad motion 
an- specific sad. pradical 
measures to reduce unempHqy- 
znadt Duchy of -Cornwall 
Manageanenit Bill, Second-Head- 
ing. 

' Lords: Transport B3J, Cmu 
ndttee. Fwtfeataire Bill, Report. - 
Select Committees: - 
Affairs, sub^Mnmrittee cat. Race 
-.Relations and Immigratioii. 
Subject: Racfeal Disadvantage. 
."WStn^ss: Mrr.Asitfaony.lNewton.'. 
,'MP, Parliamentary '' Under- 
.Seoutaiy of State, Department 
of Health and Sociid Security 
.(Room 15, 11.00 am), 

Treasnxy and Civil Service: 
Subject International Mione- - 
tary Arrangements. Witnesses: 
Mr Bryan GouJd. Mir John Mills 
-and Mr Snah Steward, Labour 
Economic Policy Group; Prof 
Artis, Manchester Universit y. 
(Roam .15, 4130 pm,) • ' 
TOMORROW 

Commons: . Conclusion of 
defence dehate.' Motians on 
National Health .Service 
(charges to visitors). (No, 2) 
Regulations. .• 

Lords: Firearms BUI, Third 
Reading. Employment- BiH, 


Cin ematograp h 
Bill, Third 


Committee. 

(Amendment) 

Reading. - 

Select Committees: Employ- 
ment. Subject: The. working 
of tiie Health «rwi Safety Com- 
mission . and Executive: 
Achievements since the Habeas. 
Report. Witnesses: Society fox 
tite Prevention of AsbetSdosis 
-and Industrial Diseases; Sir 
Bernard Brains DL, MP (Room 
8, AOO pm.) 

Procedure ' (Finance)— Srt>- 
ject: Procedure - (Finance). 
Witness:- The Rt Hon Edward 
da Gann, MP (Room 15,- 4.15 
pm). ■ Parliamentary Commis- 
sion for Administration— Sub- 
ject- Reports of the Parliamen- 
tary Commissioner far Adminis- 
tration. Witnesses: Chelten- 
ham District Health Authority 
(Room 5, 5.00 pm). 


Committee.' Forfeiture - Bill, 
Third Reading, 

Select Committees: Scottish 
Affaire — Subject: Prestwick 
Airport Witness: Mr lain 
Sproat, MP,- Parliamracaiy 
Undersecretary for Trade 
(Room 5, 10.30 am). Industry 
arwi Trade— Si&ject: UK trade 
with ASEAN countries. Wit- 
nesses: Mr Peter Rees QC, MP, 
Minister for Trade, plus offi- 
cials; and South-East Ada 
Trade Advisory Group (Room 
16. 10.45 am). Welsh Affairs — 
Subject: The impact of the 
Ektropean O mumnni l y on Wales 
Witnesses: Borough of Tbrfaen 
(Room 18, 11 JO am). 


WEDNESDAY 

. - Counons: Local Government 
Fmance ^(M». 2) Bin, conidn- 
skm of consideration of Lords 
amendments. Motions an the 
internatioml fund for. agricul- 
ture - development and- the 
African development' -fund, 
orders, and Building Societies 
(Special Actamcesk Order. 


THURSDAY 

- Commons: Debate on the 
Armyi on a motion for the 
adjournment. 

Lords: Northern Ireland BED, 
Second Reading.' Various North- 
era Ireland -orders.' Short 
debate on (he Rayner recom- 
mendations on the . Theatre 
Museum. 


jLordy^ Epylognaaerit Bin, 


FRIDAY 

Commons: Private Members’ 
Bills. . 

Lords: Transport Bill. ' com* 
mittee- stage v ; 


WEEK’S FINANCIAL DIARY 


The following is a record of the principal business and 
financial engagements during the week. The board meetings are 
nmuly- for the - purpose of considering dividends and official 
indications are not -always available whether dividends concerned 
are interims or finals'. The sulniivislons shown below are based 
mainly on last, year’s timetable. 


TODAY 

COMPANY MCTTtNGS - . 

- Allied UttW I Ads. - Vlcwbl Hotel. -SW. 

li.00 • 

Break street Bureau al Mayfair. Eurapr 
rtad. awenor Square, w 1200 
Enayy Service* And. EUctrtaJe*. iMtltule 
Of Director*. 116. Pall Mall. SYr. 12.00 
Lud OevmMre. House. Pico id II.. 

PentWnda hnJ»> Kinaimte HunEe. Station 
feM4 New Barnet, HertfordtMre 124W 
Plnate 

Assodated Lfcsure-- 

Blnmoatiam Mint - 

LRC me, * - 

London Pavilion 

May and HweH 

ParWtde 


Araus Praia Haldlngs. Stratton House. Pie. 
cadlttYi w. 1.1.10. . 

Carless Capai -and Leonard. Tallow 
Cbaodtert HIH. A D ornate HilL EC 12.00 
ClirH OH. Brown* Hotoi Dover Street. W 
12.00 

Hawley Go. Shaoeenhaoeen Hud. 
MakKokaad. Berlesftlre. T 


10.00 


Hrin ec. ej. Queens Room. Baltic £s- 
1=20 « Maty 'Axe. _ EC 12.00 


Londof’ and 1- Meiihorp ' Oo.."E«s*k HaJL 


Enn WC 3M 


London 'Tfc Coaoaoflht Roams. 
Queen Street. wC. 1240 


Cram 


RosacH (Alexandetf 
Safcert lnfL 


Erlsllnoton. ^rltSOl. 12.00 
Mok J«*t J Iren mongers HaU. EC 11.30 
Oceans' D e nt . Her. TSU Z. SL Mary Am. 
]>1 >30 

Panther See*. SB Meant Pleasant. W. 
PHnce° of Wales Hotels. Prince of Wales 


T«*tnrad Jeraty 
Wctsofi ■ 


Whom 
Tetm-lwd- 
,SGB • . - - 

■ DIVIOENJ3 4. IMTBREST PAYMENTS - 
Anns. ZAoc I^M. Do. 2-4K, 1 Upc 
Antofagasta (CMII) and Bollyta Railway. 7o 
Ranker* lay. Trt. DO. 4©c 
Barter Braes. (WraenanO. X.3o 

lijSSffW& W l. tii 

tewdtl %oew. Do. 1 h€K 
COlWd. 2 hf< 1LPC 
Cone AlUran Intiti. Is 

s»30fc 1 Hoc 


Hotel. Lord Street. Southport. 12.00 
Stmtart (Wn.) CewrlUa Hotel GonHIle 




BOARD 

Vtaalss 

Holla* 

Technology invest Tst 

W ^{vJlrENO tJ & INTEREST PAYMCTfTS — 
Allied Leather Inds 3.79a 

Qh&iEPU • ■ 

House or Fraser Dp 4oe 


Kemom? invest 4p 
_ " can Brse er l ei 


South African 




gjjtn A Jjlcan Braveries Pfs 6 J and 7 PC 


external Inv. T*U 4. So 

Hnt Chartartte Asset* Tit. 0.1 3p 

Fletcher Challenge PI, X20B2SJ. Do. P». 

TAP 

’ 1 °^ S.' £bc 2 AIK 1 

y*25 j* bnc » r < Go.), 2P 

_ JW7p 

Ley land Mnt and- Wallpaper. D.7Sp 
MvDonald Martin . DiatA. 9 Jo. Do. B 
4.75P 


Gopeti 


Viking IMserrres Ttt OAa 
Walker Cl. OA Ip 
Warrington rrwnw*’ 3.55^ 
Yoeng and Co's Brewery 4n 
Young Co's Invest Tst 22* 


THURSDAY JULY I 
COMPANY MStttNGS.- 
AleWe HldSd. Atelitg - House. Honeypot 
Lane. NW. 12/10 . 

Bremner 44 GlasrtOnl Street tSUssow 
10.30 


Barytes no longer waste as 
it helps prevent oilwell gush 


JLt' 


BY PETER CARTWRIGHT. 


INDUSTRIAL WASTE from 
Roman times is the unlikely 
material playing ah essential 
part in oilfield developments on 
and off shore. 

Neither Romans nor Anglo- 
Saxons had use for two main 
waste products, fluorspar and 
barytes from lead mining. It 
was only 40 years ago that 
barytes were used to prevent 
oil wastefully gushing out 
during drilling. A high-density 
mineral mud can be made from 
it to hold down gas and oil at 
high pressure. 

About 90 per cent of world 
production of 7m tons of 
barytes is now used in drilling. 
It is the principal constituent 
of drilling fluids, though the 
range of mixtures is extensive. 

The amount of baiytes may 
be no more than 50 per cent, 
but its value as a geological 
pressure container is un : 
rivalled. It is extremely heavy. 

Barytes has long been widely 


used in the chemical industry. 
In the 19th and early 20th 
centuries Shropshire was a 
chief source, but these work- 
ings are largely exhausted. 
There are deposits in Northum- 
berland. Cumbria. Devon and 
Somerset A more prolific 
source is the Derbyshire lead 
mines. 

One of the major ore fields is 
between Castleton and Wirks- 
worth, historic centre of lead 
mining In an area about 20 
miles by five, hundreds of 
thousands of tons of barium 
exist either naturally or in 
spoil heaps. 

One big extraction project is 
at Bmsisgton, near Wirks- 
worth, where SPO Minerals is 
approaching its 'planned annual 
output of 50,000 tons of finished 
products. 

The plant will separate and 
sell other minerals, such as lead 
and zinc, that go through the 
mill. 


Laws governing lead mining 
are among the tew to have sur- 
vived independently of the 
main body of English law. 

If a dispute arose one would 
not go to the county court for 
redress- but to ' the Bannoic 
Court, presided over by the Bar- 
master 

The Barmaster' . is still an 
important figure as the Queen's 
representative in her title of 

Prospecting can go or. almost 
anywhere except churchyards, 
gardens, highways and orchards 
in the “ Queen’s Field,"- regard- 
less of- the landowner's wishes, 
but reports or finds and of 
amounts of lead extracted or 
calculated from assays must be 
made to him. 

The miner must pay “ lot and 
cope” to the three principal 
landowners, the Dukes of -Lan- 
caster. Rutland and Devon- 
shire. This used to be one dish 
of lead ore. 


JocGM-Dfa. LI** 


•Im* An. Jt- Corn 


Mfttand Marts v 2.76p 


Stcri. 0.71* 


Nmi ertttak 

Mwtti Amor. T*t. 1. _ 
Nurtln mm Peacock. IJTSv 
Plaxton* «A.i. So 
Riley Leisure 1.5 b 
wsuv 


Airport. MWdtopr. 11.00 
Hill 5*miiH Go, MaWeran Kell, 1 London 
Wall. EC 11.30 


London Sumatra Plantation* 1-4 Great 
Tower Street 


Mar 


Director * . 


ufrjsrwcttA? 

Sandhurst Marketing. lAifia 

a ROOertsoo. q.TSa 
Ontario Inr* 2.1GP 


SJSo. Do. .B, m 


and Condon In*.. 23. So 

Safer. Eltc. Lie. *boc 

Tarmac. 12.6p 

Tel. Rental*. SJS» 

Toots Grp> 1- 


Trsnaatlairte and _Geo. in**., iu 
Treasury 8 UPC 


Vcsoer. So 
Y-uie Carte. 


11 


AM 

Do, 11*tpcn. S.75pt 


EC, 11J0 

Park Mod Taatile. Rarinmy Hotel. Load*. 

Sotfttieod Stadium Southend Stadhim 
Southend on Sea. Enex. 11 JO 
UBM Grp. Avon Wor k* , wimarstoke Road 
Bristol. 12^0 
BOAAO MEETINGS—— 

Floats; 

Booth OohtO (Bolton) 

British Building and Engineering Appliances 
Ocean Wtlsona 
Interims; 

Imoertal Go. 


DIVIDEND A INTEREST PAYMENTS — 


TOMORROW 


Anodated Paper 
BmhonsTp 3. 

BrttUh Borneo Petroleum Syndicate BMo 


A^SSff^SSCReddttth 3.00 
Bambari stores. Gt. Eastern Hotel. Lher- 
pool St_ EC. 12-00 

Belpraeg* IB1 ackhaadt) Balgra** U.. Haiec- 
paeen. 12.00 - ... 

Ftett tv^ Rada> . _ UycTjContlmfitBl. 

Mo “- Dow Bareet 


ge neral fcottKh Tst 2.1 b 


3.5080 

Heath <C- I.) 9.1 


Hartfcn-Stuvt 


Kt 


London Trwt’ 2-Bo 
Lovell fG. F.) 


OM 


w. 


City 


WWringtoa iThoraad Queen Hotel 
Road. Cha«ii -114JO 
Youns and Go's B raw, Wart Centra 
Hotel, Unie Road. Fdham. SW. 122X1 


ass **" wa - 

SRngsby (H. C.) O.Bp 


FRIDAY JULY • 


BOARD MEETINGS — 
Finals; 

Daoaa invest Tst 
E dotty Consort Invest Trt 


lnaiuljl Cc 


rttsson Latsare 
Marttoo Thomosoa-sod gv erau e d 


ToottotR fR. W.) 
Watson (R. KeMn] 
Interims: 




Macpheraan (Donald) 

IVtOENO A IWTERST PAYMENTS - 
ta Irish Banks Ota. Rota Notes IMF. 
JZO. 

td. Sprayers, a«p 

S5?d - 

aSuS®" stS Ln. SdK . 
rrtinest M n drans tooth, noeta. 7 >bpc 
CoJman (E. A.) HMr Lc 4oc 
CourtBulds 5*>cPf.. IJBot; Do. La. 2I«C 
Detta Go. Ln. LTbe 
FbtdhOrti Fin, Uk. AUpc 
rntuumus Dfa.. SVt 
Grattmn. 2 j25b 


COMPANY MEETINGS — 

Bgh^jrS jkea gu ry. The Phoeahc. Govsla*. 

Hunting Gibson. 3U KnlelrtstrrMge. 12.10 
Minster Audi. Savoy Hotel. W XOJDO 
BOARD MEETTnGS— 

Flute 
Scott (David) 

SlcntrtH 
i nt er H a s ; 

SoThtfry Parte Beret 

DIVIDEND & INTEREST PAYMENTS— 
Advance Services 2Jp 
Agriommei Mortgage IWipcBds 917182 

Alto? Hidos 2JW5P. 

AJfhucd CaoShS 0^O75p 
AhiturnJ IncShs 4.75p 
Bellway So 
Bremner 3.1SP 
British Syphon ImS 1* - 
Brownlng-Ferrts I to 2S cts . 

o£ta l LSan5oloi ? n fc<yff P 16 Cts 
Csustoo (Sir Joseph] 0.7B36P 
Qiemrlng 2 Jo 

Daon Deraiopmeat Cporn 4 cts 
night Refiteiltng 2JS3m 


BE 


Geers Gross. 2o 
Greetrtetds Le 


LewM 
SSS.77 
Llnmd Ob- Tta 


Rate Notes B 


Lloyds EuroA nance Ct^ Stts-MOr Flag- 


Rate Motes 1990 

Manor Mat. Gra. Motors 1 0hpcPt. SJfiec 
Morgan CrudMe Dt>„ AAtoc. O a. Lmi 2V 

IWc 


PemSand lid*. 138* 

Pratt 0=0 EoC. Con. Lo- 4pc 


Pnt clia rd Services l.7Sp 
Smith fw. H.) Db. 4- 


ud 3 Vac 

SVot. (1987-92) 


4oc. Do. Lns. 2*». 


-hirre OOSn 

Kelsey lads 2Jo 

London So antra Ptaoaatlons So 

Nortf! Midland Construction OJSp 
Oceana Dev Inv Tst D*Sp 
Panto rP.JOJo 
Pmriciand T«55 2.1a 
R o w utu e Mackintosh S.3p 
Southend Stadlom 0A7p 
Southend Statom Pfd 3.51p 
Stockholder* InvestTst 1.75p 
Tliarpoe Gp o.si* 

Vaiix Bimra il es 2.75P 


Tarmac _ 
Wh h a read Ln*. 


SATURDAY JULY 10 


Jte. and Sloe 


WEDNESDAY JULY 7 
COMPANY. MEETINGS — 


DIVIDEND A INTEREST PAYMENTS— 
Ireland Ihpc 1981-83 3->*pc 
London County SVsc 198S-B0 Vioc 


AWfund- 2. SLMarv Axe. EC 12.30 
Argg* Press. Stratton House Plccatflly. 
W. .1140 


-SUNDAY JULY 11 


DIVIDEND A INTEREST PAYMENTS— 
- - no Society 1&Gs>c 17|1<B3 


Natlocwlee Building 
8>apc 


The Continental and Industrial 
Trust PLC 

Managed by J. Henry SchroderWagg & Co. Limited 


The Annual General Meeting will be he(dat120Cheapsida, London EC2V6DS 
onTuektey 27 July 1982 at 12 noon. 


Details from the Report and Accounts for the year ended 31 M&K1982 



1982 

1981 

Total Revenue 

£4^09,046 

£3.563,592 

LessrBcpenses 

201,689 

200,882 

interest 

172.046 

295270 

Net Revenue before taxation 

9&83&311 

£3,067,440 

Less: Taxation 

1^55,704 

1,158,486 

Preference Dividend 

38^500 

3asoo 

Net Revem^avaflabte for Ordrrary Dividend 

£2,241.107 

£1570.454 

Earned on Ordbiaiy Shares 

13^3p 

11.04p 

OrrSna/y Dividends paid (net) 

iaoop 

llJOOp 

Net Assets attributable to: 

£’000 

£’000 

Debenture Stocks 


3,052 

Preference Shares 

1,000 

1,000 

Orcfinary Shares 

62.683 

63.868 


Total Net Assets 

Net asset value per 25p Ordinary Share 


66.704 


67,920 


37O0p 


377.Qp 


During the yeartheTrust added to its investments In the United States and at 3! May 
1982 408% af^ the investment portfolio was invested overseas; mostly In the United 
States, compared with 442% at 31 Max1981. As a result theTnistis income from overseas 
was significantly highei: Expenses remained at the same level as last yeai; but interest 
charges were sharply reduced following repayment of the currency borrowing last yean 


Cc^ies of the Report and Accounts are available from the registered office, 
120Cheapsjde. London EC2V6DS 


1 « VI RNiiV 

5 IZ 

! % ,.];)■ tnSW 


F: 

■O'.: 

i . ;',i I f: 

Vf 

V* 

31 ' 

% v::.? ‘>- 

i.~ - 


t tr , 

h >: « * 

f? : 


ZC 

’i®. ■; 


.3 * 


dU-r.- 


7*1“ 


/l» 

ZSi 


511- 


,t£* « 


aj 

*r* 


Air,* 


ir, r* ■ 
Mi 
A-". 

-V4?: 


.•■a ' 


WC. 


e ? . 

.Ul 

mu • . 

tc-- 



at the heart 



Cfiugai 
Japan’s, 
pharmaceutical com- 
panies, currently: 
speficjinglO% of its 
turnover onR&D. 

This $ 30 m 
Bond Issue, 
the. first , for 
Chngai, will 


assist the Company’s 
international ex- 
pansion based on 
.continuous devel- 
opment of new 
high-quality 
products with 
international 
marketability 


ci) 



CHUGAI PHARMACEUTICAL CO, LTD. 


1-9, Kyobashi 2-chome, Cftuo-Ku 
Tokyo, 104 Japan ' - 
Tei:[03l 281-6611 


Tiaeuearitia have been mid oatade theUmted States of AmBriaiaadJiqaiuTHsaammcemmt 
appears as a moner of record oofy. 


>usyV ISSUE 


293l June, 1982 



CHUGAI PHARMACEUTICAL CO., LTD. 

(Chugai Sdyaku Kabushiki Kaishd) 


U.S. $30,000,000 

71 per cent. Convertible Bonds 1996 


Nomnra International limited S. G. Warteg & Co. Ltd. 

S mmtomo Emace Tnfanwfinnal 


Benfsche Bank Akfieaigesdlsdiaft 

Swss Bank Corporation International Tmrifed 


Society G^a&ale 


AI-Mal Grorqi 
Baoca dd Gottardo 
Bank Brussel Lambert N.V^ 


Asdebbankeaa/s 


Associated Japanese Bank (International) 
LWMI 


Banca Commerctele Ttaliana 


Baakffir Gnneliiwirfsdiaft 

Alcttewesrilacteft 

' Basque Generale dn Luxembourg &A, 


Bank of America Tniernatioaal 

Limited 


Bank of Helsinki 
Lid. 


Bergm Bank A/S 


Banqne Worms 
Berliner Handeb- and Frankfurter Bank 


Bfflupe de Paris et des Paj-s-Bas 
James Capel & Co. 


Buns Fry 

Iimhdl 


Baring Brothers & Co., 

JLfarttod 

Ooeaaye & Co. (Oroseas) OBC Compagme de Banqoe et dTnres&sements, CBI Comfy Bank Credit Xndnstriel de Commercial 
hmM Limited 

Deutsche Gfroxentralc Donunioa Securities Ames 


DaJ-Idri Securities Co^Xtd. 


Dahra Europe 


limited 


-Deutsche So m n mnalbftnk - 


JM. 


Robert Fleming * Co. 
iinhtd 


Fuji International Finance 

Lfaniud 


Eflectenbank-TVarturg 

iMilliBMiiiillirairf Ltmi 

Genoseoschaftlkfae Zeutrtibank AG Girozentrale and Bank der Sstermcfuscbea Spadassen GoWmaa Sadis International Corp. 
Vienna AktkhrtCstUtdali 

Hcarische Landesbank HE Samuel & Co. Kidder, Peabody International Eemwort, Bason Kuwait Financial Centre, sjlIc. 

42n»inl*< LboltHi UbM liodud 

Kuwait F or eig n leading Contracting dtBntdment Co. (SAJK.) Kuwait International Finance Cwnpany SAK (E3FCO) 


Knwaitlntanatioaal Investment Co. sji.fr. 
Ldnnan Bfottes Kidm Loeb Aria, Bit 


Kuwait Investment Company (SA.K.) 


Kyowa Bank Nederiand N.V. 


Uoyds Bonk International 
Lomicd 


Londoa & Continental Bankers 

Limttd 


LTCB International 

Lfaniud 


Merrill X.vndilatnnational & Co, Mifcnbislu Bank (Europe) S-A, Mitsui Finance Europe Mitsui Trust Bank (Europe) SA, 

JLirtitel, LaorioR - 


Morgan Grexrfdl & Co. Morgan Stanley fafenatiamd New Jxpiai Securities Korope , The Nlkko Securities Gl, (Ekirope) lid. 

TmA 4 Limited 

Nippon Kangyo Kaksznanz (Etaupe) Nomnra International (Htmg Kong) Ltd. Nordic Bank 0c Okasan Xniernational (Europe) 

T tend Ltd. 

SaLOppenbeimjr. &Cie. SaHama Bank (Europe) S A, 


Pictet Brternational Ltd. Hersoo, Hddring & Pierson N.V. 

Sanwn Bank (Underwriters) Sanyo International Ltd. J. Henry Schroder TVagg & Co. SodcteSeqnanaisc deBanqno 

limited 

’SparitankerttasBank ' StnuiicRno Iriist lutezratianal Limited ' Srenska Handefabanken lie Tatyo Kobe Bank (Daembourg) S A. 

Yaeins- mid Westbank A.G. Mckers da Costa jjternatioBal Ltd. 

TumaMii TatemgfirmnT (Europe) Yamatane Securities Cn^Tifl, 


Toyo Trust Asia 

Limited 


YfakoMmrfhnal QEnopO 

limited 


Warburg Paribas Becker 
ltt conwmm d 












is 


Financial Times Monday July 5 1982 


roatolfclttoteiaBmta ^ «* **■ ' Cwg qpf S tack &nrf«no»fOT thn purpoc a ofgtafaq tafanaMtew ta to gubBc wflfi ward w Artamg Ras aa t*h 

- docoaBot has bwa pnpaurf so fires nosslWaois tea bads drat ft* attjtristttoru namJo«d herein haw bacnrttnpteted ^ 

Thn rv>i> rl r«.— li.i ■ r ..i Stock Ifacfrato facto OreutoShtowltota«tomteaf« irwhligl Afa>mis.ltotd and » l^ln^»»»o«naPH»Jlw^.»b«a*Pi^«P^« ^U^ nutmaU 

cntcEnsoriHMean drerecL 

ATLANTIS RESOURCES 
INTERNATIONAL LTD. 

(Incorporated in Canada under the Companies Act of the Province of Alberta) 

Placing by de Zoete & Be van 

of 3,000,000 Common Shares without nominal or par value 

at 45p per share 


SHARE CAPITAL. 


Auborktd 

zt oogooo 


introduction 

Attantta urns incorporated In Alberta, Canada is i 
entered Into coruMomd comrea* to acquire 0 ) all trial 
by Mr. LH. Payne, the President of Artemis, which owi 

(»> an tee wed Via os of AD 
and his wife. Mis. M. Q. Payne, which owns interests In « 
aoqutattoni tiro buttress ol to Group wfl bathe to 
wtswn Canada and to United Sales. 

Tha acaotaftions will requira to issue 01153931337 i 
A*H w sane (Me a macing of 3300000 Common Shares ai 
Mtonsand tbs placing are aradfcfanal {Inter alia) on sddi C 
Council of The SlocJc Exchange. SnbfaH to Doing bring g 
compiead oa 71b Jotr. 193Z and that dnUnas in the Cora 


.J but did not eonrineiieataediwsstmtfll Junta 1982 when It 
. i of Attoruta Resources. a private Albana company controlled 
3 in canain oSane ramus! pas properutci and also aco a* o perato r 
»4doiaiion. a privsn ARMita companr owned latathr t>V Mr. Pavna 
* natural gas prooemes rand «li) tire Payne Assets. Foltowfngtose 
not and production of and expkustion for ofl aod natural gas Ut 

anon Shares of Att ends and to ua y u— i t of it .flOQOOOtn cash. 
> per share is being made by de Zoete & Sevan. Bo*» the a com- 
mon Shares or Atlantis being admitted* the Official List tar tha 
ad. It is expected that The a cunWit on s and the piecing will ba 
i Shares of Atlantis win commence on Aft July, 1962. 

OBJECTIVES AMD BUSINESS 

The Ot racwra T objective la that the Group should both develop its radating Interests end acquire farther Interests to oB and 
sas properties. so aa to maintain a balanced pertfoBo of dawatopmem. production and exploration (morass. TJ»a Group at oreaent 
con c ent ra tes Its acMtka on medtam-fitt exotamifan prelects in Albans; British Columbia sad Saskatchewan tn w m irnn Canada.* 
and to Louisiana and Iftnois in the United States. U ta envisaged that further acquisitions wM ba mado primaifly At areas wtma 
Previous uxptoraiton boa estsbSchcd the pre s e nc e of hydrocarbons. 

The Group, as well aa being engaged in managing itsratisttog oil and gas interests and aeakfng to acquire farther udaiMle 
for III own account intends, asa mefarfeitiire of its business, to continue the policy which Attends Roaoorcas has suetea*fu*y 
pursued of Wamlfvtng ofl and gas prospects ttirough Its own geotogleal research aod raising joint venture capital for use by It rr» 
exploring end developing those prospects. Since April. 1979 thcmrgn Joint ventures organised in Canada and in the United 


Kingdom a total of *31 .031.000 has been raised for these purposes, of which at 31st May. 1882 a p prox tom aty 35,700.000 
renamed unexpended. Adapt* Resource*. as operator lot the fouu. ventures, controls the drflHra operations wftfle the hvestats 
In the Joint ventures ere responsible tor moat of the costs of aotplonnlon and development, to maim for tat sendees aod sxparttea 

■Aflanw Resources samsa wo rkmu Emt aat of up »25 per cent, o* the joini venture's frnerat In each p nppeta . A tl antis Resources 

has thus been sUsto accumolete a mn]or ponton of la teoervee of hydiecaraorts wfthbut having had to tacot algaHlcaAr eaptois- 
Uoo end davetopoiart expenditure. 7bese aaansamaanr are dsmitiod In mom deal trader “Joint Vartan Managowenr. 

HISTORY OF ATLANTIS 

The damfopmsm of to oB and gas taterasts owned by the Group has been attifbutabla prinrfpaOy to Mr. Payne. He has 
hod many rests’ experience bi the oil and gas htdusur during which rime he has held senior poettfcuK In several independent oU 
cotpomt i ona and been involyedln the dtseowry end ptodoedon of gtgmficgat quantities of bydtocnocosbt north Amcdce and 
etaawhereln tftawoitd. 

in 1978 Ml Payne acquired mntaMHHtaacmagakicstad in toFtae Creek area otABrcitawtttpvotioctiwaaresetvas end 
additional exploration potential, in late 1978. through Adamis E xplo r at ta n . Mr. Payne participated In diflUng 2 wells on acreage 
hi the Hux ta y-Bncra ares of AJberta, both of which eocoonterad naunl gas. In eedy 1079 Mr. Payne, on hie own account. 
paittdp«teointh»dr8hn8ot»addftignalweflstnihlsarae.AsBreamtoHhe9edrtiBn8Pfog M n » aeaconanercial iaTei v nT Ot nataal 
gas were discovered. 

Ini 979 Mr. Payne, together with Mr. D.C. De acon and Mr. L. D.HoweAfotmed Atlantis Resources with a view to Holering 
fotand developing od and gas in vstKxn locations In Canade and the United Sates to be fosneed aebriy by funds raised front 
consortia of Investor*. For the first drMng prog nmmaa sum of 32jXXU>OOwes retted th roughs CaoetUenfirint vnotma. FoOowtog 
the success of die first driUing progtan me further funds fairs been reded r~^«a«pf»wp— «"'■»*■ ip 7iiii.l i ii. .» .i» MnMiiu 
These are mare fuBy described under “Jdlnt Venture ManegemenT. 

The ecguisnlona of Ada ntisRe»3tiices.Att3ntteE3g^ oration and tha Payne Assets will bring t he vario us ofl and gas Wtarasts 
■Sseatopad by Mr. Payne within Ore ommship of a stnoie cotnpmr, thus creetios a asoaa tasa for riw future stoarth at rim 
Gxoop^existina actinties. 


OL AMD GAS PROPERTIES 


(a) Suirenerr 

The loBovring table sumnarism the prednettve acres and nol ran 
rite Blast Bapotfcmniaitatila to the Group aa at 31 at Docambat. 1981: 


Csn&df 

Albana 

British Coimntga 


t after toyaSSes, based oo the esuagtsaewatfoedta 


United States 
Lourstane 


Produabre Acres 

Ol 


Gas 

Siriphor 

Gloss 

AW 

Proved 

Probable 

Proved 

Probable 

Proved 



■ wa) 

CUItcn 

tfagtea) 

24315 

2^48 

11830 0 

40600 

8.147 

3JB1 

1,278 

6340 

174 

24500 


285 

434 


280 

12 

8J00 

5/400 

— 

— 

— 

84D 

10 

11.3 00 


409 

39 

. 

40 

2 

3.000 

— 

— 

— 

• 

31 Jit 5 

2846 

165200 

nr» J nnre 

&841 

4.024 

1278 


(b) Dosorlpdon 

The foeowtng b a description of the Gtoop’s principal hofcfings}— 

HtadsfOnon. ABterte 

Tbs Group owns working in t emas in the Huxtor-Bnore area varying front 125 per cant, to 50 percent, before pey-oot 

C3A945 pat cant, to 5D per cam.attet pay-out) EnlS.934 grass acres (2287 net scree). As at 31 st December.1981 iSweUswen 

capable ol producing ofl and/or nature! ges. Since that date S tunher wells have been ddUad. of wfatch Aware successful. An 
arid W onal well to currently being dolled and 1 further weO is planned. Devefapmantwefls may also be required. Proved reserves 
of 4jn8 MMcf of naiurel gaa and 1 6 JWO STB of oB as well as probable tssanres oM 228 MMd of nsturel gas and 14200 STB 
of oD have been aiaflurtad to the Group's unerases in this area. 

The first natural gas production ks anticipated to coptmenca an 1st Januaiy. 1983 at an a pp ra rii wa re rate of 8 MMcf per 
•Jay end K Is expected that lunher wefts wa be onstream by 1st January. 1 984, giving additional production of a ppn rd raa tWy 
2 MMcf per day. One wail is currently producing ofl at rite tats of 20 BOPO. 

The HuxUty-Bnora area is known to have potential for gas. oil and condensate (n several geological horizons end has 
provided tha Group with substantial reserves to date. Tbs Group win actively soak to expand us Interests in this area. 

Sylvan Lake. Atterta 

Attantls Resources awns working interests in the Sylvan Lake area varying from 92265 par cant, to 42 par earn, before 
pay-out (5.71325 pet com. to 42 per cent, after pay-out) in 6,120 gross etfes (43* net acres). Aa « 31st December. 1981 3 
walls hod been drilled, of which 2 ate capable of producing natural gas and a third rs capable of producing both oil and gas. A 
devetopmem weU may be raquttcd to evaluate furthei rim ofl potential of the area. Proved reserves ol 453 MMcf gas and 9200 
STB of id and probable reserves of 701 MMcf of neural saa have been attributed to the Group's Interests bi this area. One wall 
la ennemiy producing oil at the raw of 35 BOPD; natural gas production is expacad to continence by 1 984. 

Qq pm Albert* 

Atlantis Resources hes working interests ranging from 328125 par cam. to 19.78 par canL before pay-out (234375 oar 
cant, to 1865 per cent, ■fief pay-out] In 1280 grass acres n 35 net acres). 2 walla have been dotted on thw acreage. The first 
well was driRsd In 1881 and has been assigned proved natural gee arid sulphur reserves and probable natural gas reserves. This 
well is emicquied to ba completed and on-stream by the Autumn of 1982. The second weR hes encountered prayed natural gas 
and condensate reserves. TO* wel la aubtect to a gas purchase contract and Is expected to commence production in November. 
1882. Proved reserves ol 440 MMcf ol natural gas. 5J300 STB ol condensate and 1278 tong ions of sulphurs* we* as probable 
reserves of 38 MMcf of natural gas have bean attributed to the Group’s rntnrests in this area. Atlantis ResOBtctts has me brained an • 
active leering programme in this area and anticipates dialing additional wane within die next year. 

Pina CnrekfAtberta 

Adamis owns working Interests in tiro Pine Creek area varying front 22125 par cent, to 825 per cant, before pay-out 
(28128 par cent- after pay-out) In 6240 grass acres (17B net acres). 5 wafh ate currently producing oil at an avenge rata of 
appraaanaiely aDQ BOPD. An extanswadevelopmatit programme has bean instituted, including the diDDag of several development 
wells, the building of production facJBtles and the consi ruction of a gas gathering system, ari of which win contribute to loidwr 
production bom this area. Proved reserves ot 31200 STB and probabtaieMrvesof 32A00 STB <>( ad have been attributed to tho 
Group's interests in this ana as writ as proved reserves of 62 MMcf and probable reserves of 31 MMcf of naoml gat. 

Medierne River, AOerU 

Atlantis Resources hnen 18.125 p« cent, working hUarest before pev-out (3ft pet cent, eftei pay-out) In 320 woes acres 
C58 net acres). Awed drilled ©a this acreage encountered naunl gas and a study was subsequently made which indicated that 
the reservoir is being drained by other wans In the area. Appfieaitan is being made to obtain a gas purchase contract for tills wad 
and it is expected that the wall wot boon-stream by aifcf-1983. It is estimated that the weUwlB produce natural gas at the rata of 
600 Md par day and condensate at the rate of 8 BOPD. Proved resettles of 399 MMcf of natural gas and 3.700 STB of con- 
densate have bean attributed m the Group’s interest in tbls area. 

Earring. Albert* 

Atiante* Resources has an 11.162 par cant working interest before pay-out (86815 per cent, after pay-out) Tn 5.760 gross 
acres (481 net acrea). Following the drRDng of a wall on IMs acreage which encoumemd natural gas. Adan&s Resources acoultsd 
a iob) ot 3200 groas acres adf&cent-toihe Initial well at price* tanging between *100 and *2000 per acre. Since 31 at December, 
1881 a second «utoiauiy lest wefl has been drifted and completed and It is anticipated that development drifting will occur on 
the recently acaulred acreage within the next year. Tha first weti ta not in a contract get area and is not expected to c ommence 
Production until 1988. The second well is In a gas contract area and attempta wM be made ta place It on -si ream as soon as 
practicable. Proved and probable reserves of natural gas have been aiufboted to the Group’s Interest In this area. 

Sonne tttamf. Louisiana 

Atlanta Resources his working Interests ranging from 1.047 p«r cent, to 121 per cent, before pay-out (1234 per cant, 
after pay-out) n»3.38l grass acres (42 net acres). At 31 st December. 1 981 2 wefts had been d<«ed on this acreage end completed 
as gas/ condensate dtscoralac. Proved reserves of 137 MMcf of natural gas and 8.100 STB of oB and protra trie reserves of 
39 MMct ol natural gas have beenamtouted to the Group’s Interests 'm these wells. Since that date a third weW has bean dulled 
and completed as a ges/condenme chscovery. Production faculties are at present being designed and e gas purchase contract 
has been signed lor daiureiy ol the gas to a local purcfusat; tbs wefts should be on-stream by the late auremat 0 ( 1982 . 

UOIe Pecan. Loutstane 

Attantls Resources has working interests ranging from 1294 per emit, to 1682 par cam. before pay-oat (0938 per cent, to 
p ?T"» u ’) 1 ln l^67d gross aixu (25 net sera). A web wee drifted on this acreage and comjrietad at a depth 
SLi 3 j£?2I ,B J' Tn * w-n wee, piacad on-stream M Oecember. 1 881 and n earremtv producing 6 MMcf of natural gas gar day and 
100 BOPD of condensate. Proved mural gas reserves of 212 MMcf and 3,200 STB of coo dorsals have bom a t trib uted » the 
Group's interests in mis weO. Since 31st December. 1991 2 addMonel watte have bean d-Hted In aZraZwSbnb^ 
comtiMad end Pjaeed on-anam at an Initial rate ol 9 to 12 MMcf ol nature] gas per dayand 100 BOPD otcoodensaia.Duii8aa 
hax nor yet s tata fa nrt apd do as net necessarily represent ftnure production rates. The second weO Is aweitiaBCompletiott. 

The Mmafnlag msuiros anribated to die Group am swmaifaad in paragapb 4 ol tbo BWn Repmt. 

Land Ho M k ngd 

AMnre^oftttolmidgMprcparteheMbyfin Group at 31s( Decranfrar. 1981 fowfctoti no reserves have been 
a BtflKB H.togeifiecwBheiralmilpn of tboee nw i t i iintiii at that dew by s—ton^kirdxB. i«m 


Albana 

British CoIomNa 
Saskatchewan 
Untied smu 


Grose 

Net 

ffgtoasra f 

Acres 

Acres 

Cost 

9000 

804H 5 

10080 

1J»4 

46^75 

0965 

133Z 

804 

86 

6 

33L677 

20869 

618 

141^72 

37720 

0820 


ArepoGOottoQ»sap’tiao &»ti » B ti H i pro i> eiii e> by SettetHtotdaabaat out tn Appendix 2 . 

DRILLING 

H istor y 

. Tba faUowteg table tfmwi tha groHuimbar of waBadrNed by tbe Group bttheSyeras 1031 st Dacranber, 1981 and the 

GnwpTa oat Interests threaln. Ptoductere walls oomprisa wells onwtnamand wefls capable of proriucthxabutaoty«toa-atraaiB. 


Prior to 

31st DacMabar.‘>977 
Yaw ended 31 st Docandiar 

1978 

1979 

1980 
1881 


Gross 


Net 

RodsctitfaWaSa 

Gas 

CTVGas 

Abudmwd 

Told 

Gross 

Net 

Gross 

MM 

Gross 

Net 

Gross 

Net 

042 

— 

— 

• • — 

— 

— 

— 

3 

042 

0.12 


_ 

to- 

_ 

* . 


4 



a 

1ST 

to* 

tore 

9. 

132 



026 

0 

023 

3 

022 

9 

063 

24 


OjSS 

19 

138 

2 

0.12 

13 

079 

43 

337 


■ ■ 


to ■ 





OSS 

31 

3.56 - 

5 

024 

31 

324 

89 

824 


„ In 5 rricrithjt«TTtt«dj3Tst May. 1982 the Group acqiifrad a hirrher 24,059 groae acres (1291 nra acres) and ririOad 14 ail 
52? w* 48 ns*). I ou/gas well (0.08 net) and lOdry holes (021 net), a further 8 wells are cuirandv being 
drilled, the reauftsof which cannot yes be assessad. Ol dtaaa42 welhu29 arc located bi the United Steles, princtaotty in imm mi 
and nmois. and the remainder In western Canada. 

Drilling Plans 

_ .fnjina with ft r poUc v of co noeniratirtgon areas known lo contain tiy d roeeiboirai rite Group bee titans to drin around 15 

walblnthe Huxtey-Bnara. Srrtvan Lakn. Crtwriteld and Earring araasol ARMrtBandaroundlS wrtsln Loutstane end HKnotodurlng 

w ^yw dwi hiritief tire tuenres already estaUbbed. In addMon. tire Group In tends to drill appromnarety a funhw 
3° wePs during tha next yea r, of which about ona-thM would be ditiied on other lends cuuentiy held by the Group eref the 
reowlnderon i new grnpam Atlantis Resources to amendy driUng ■ wan in the Adeatt area of aritWi Coiumbtetoeam a 235 
per c em.worfc«> o Imo wra be fme pif-OW (12,5 per cam. after pay-out) In apetwriurately 8 L 080 acres; drilling is w be 

PRODUCTION 

HlitarY 

Teno ns ■ 


Canada 

Alberta 

British CotowMti 
Saskarcfiavnn 
UritadS&as 


OB WaMs 

GasWefis 

Off /Gaa Walls 


Nat 

Gross 

AW 

Grass 

Nat 

•14 

044 . 

23 

345 

5 



022 

4 

CMS 



2 

043 

tore 


toTO 


2 

049 

4 

005 




■ "P 

— ■ i ■ ■ 

- 

ii 


— 

22 

028 

31 

388 

* * 

034 



— - 


_ 



Atthedaseof business an 14tl* Jans, 1982 MuberilMfaHtalisfchMtathemBMIMi iB i Mte ld kg^t ffbaftraO 
had oacuand&ig a secured bank loan of fIJSOQjOOOk Save as aforesaid and agora from fattra-Group ffadmes, no Qsmpmty lathe 
Group bed ouaamditg on Drat de teen y mongeueA . dames, d eb entu re s . M a n creatai fantsraotaog or creeled but antamred) or ofcer 
bogowjngs pi tPdobtednerairnhe astute of borwrioB. fachnflog la n ik iwa n lie ft i taWta s maa e fyapt s nr ei oraccapte nr e cr e dltv 
Mra putchesec uMuumireuta . ot an y g u e raa aesoi other material coatiageot DabBtles. 


mucioiui, oFttaa* ahd adviww 


gessssessssssssei 

g£SSS 

bSmawM^ 11 

ettaantEDaocK sntt tMteWiMWW LWPi«nW^<itaii 

UOKNE DOUGLAS HOWES ( Wti flraMaCfDNMW ) 
EAYMORDVMICEMXaia"* P**^ 


ROYAL BANK OP CANADA. meTwa 

S-Stt. AMwaWv Qtigafl&^ttMA iTSPaMC 


S^^<^torataaK=M7EE«miTtra 


^Sadionn40lMdiA«M*aKiCM 


T2P0» 


ssssta 

Aadhoro saw! Reportl tag Au u uunrenta_ 

SmN^uSctSSg^Svjj-t.— ------ 

TtmTaOtMOi Awisoe S.W* Caigsitt Afcetra T3P2W. 

‘Mbteral M “T — II( eo ria ii Utit i t e 
Itealstnmvmd VitatitaM Ttsmrter «Oo* 
tareneh MoBtotaratm and &!£?* 


PEFHtiT»NS . , 

HtetoUowfpgrfelMfiaBB«o need fluuu pbo dt t his d oc mtitttti — 


"AtiantSd' 

”Adao8sBi 
'-AttaaOiExpteraSonr 
ThaGraotT 
The Payne 1 


ABaato Rasotsces Memeflosal Ud. 

AfcnBJ Rqamnrae I tf # 

Asfautis Esdotation Ltd. 

Attantls and ta sufashAata Wtowtaoltai 
theoBand gnprafraotes imaadby MLUH.P*yMara8MneKqmra6tarAta8»Mt«BaanBd 


-LeVsBoaer 

"HeSer 

“Bain E bg ft reat in tf* 

TfMBtakattepoitr 

'SaatPA-tenfair 
‘■a a t ima i a c l net c ad s flowT 


u» VaOanet CompiBT UadtacL 
HsOer Resources Lid. 

Btain EngkraaringAasadllBS (198(9 Ud. 

iba report by BUfo-Eoginaaring mt out to Appantfx 1 

SeatonHjerdsn & Associates lad. 

tits estimated future ISWOCI stream generated by tiraacodacti ao of^ tire re 
Group after dedualBB Ml appSattfe royalties dkect taxes, operating . 



a attributable to the 
land future capital 

tire total land asrat, naamred In acres. In which ta roans ta bald. 

the am obtained by ircricmt|fng grass sens by tha percaataga woddog Interest owned tftwda. 
Such fntafemeara sobfact to royalties and In soma cases to otter ooP-tamUng interest*, 
wftb respect re a wan tirat has besadriBed and coare tet ed far p ro d uc tion the point at which Sre 
fovonoas therefrom equM tbo duling. cosnptanoo, eqrappiaa end operating cows of the wML 

have the same maaafngs aa at* aodbosad titateto la the BMn RbpoK. 
an Enwwr ta a properly and in any off and gas rewrooe obtttasd ftafB&om prior to d adircri w i of 
lassoc toyahy and ovsnidtag and any other ooo-wortaog maraasbald by othera fa that ptopwty. 
Rflfarancas to^DetesT and Ym to Craratfan Ddhrs meeapt where otirmwise stared- At a» dose of b u s ines s on 28di June. 
1932 dm ariddta matkatopec oxobsage rata berereen * Cauarfian and £ Ssedlitg ta dm loodon fdntate exchange mafkat was 
8222 loti. 

Units of MaasaraOMBC 

OHandCondansate Measortmeats 

1 STB — 1 stock tank bam! of tit t» condensate. 

1 BOPD “ 1 banal of oH or condensate par day. 

ABoffand cou den ra tavctaMoa wa o mw — d taateratad 42 US paten bands (35 

Gas 


T H ova d rgscrvesTend 
"probabte tesarvasT 
•^Mdcaig iutareW" 


1 leef-lthoosaiaS cable teat- 
1 MMcf — 1 mSoo cubic fast. 

All gat votmoes are expeesaed in cafaie fast at standard taotpraatsae aod pnsstm. 


l£l^.MBgan4*8n63Q>lrecaimtite6acretety«Aiteuo.ror^«^-~- '" — ' 

are based In Camda and iba odrer In tire Unhed Stares. 

abtotts and the ptadng wreodoa ed Iterate. J g J M— Mmd IMWCtaf 

eftire htatodcMcmconyraiiliw ao d^ tiCCt^N to M j >1s>0 oa. IT the Groupta proved I aod 


- X -^i.im iearorBJiiB. It roe wropi 

saiemsnts mntara d "■ tSSbreteMisamawd net csfh Dow dtacmiMedal the ioh iof tops* 

wmddhaaa l BlI o re a a— nitamta Attattita •**— * — * 

AttaofiS Rmowcaa CqtioMon 

8000 SDK) ft no 


ro od 


Tbtf 

8000 


°^bo^twIuepe*pwf<anrecont tiBif « l a d 

betaocesheac 


Aenstatadon 

Reserves pf 


DBomoiactadtt 


production baton MtabllM 
Other proved raserves 
Piobebfa resenree 
Mon- w em w ptoprettaa 

Total oH and gas pcopeitfiaa at vataattao 
Otherfbred asautsaod uumnt suvrr leea 
currant BabBWaa. dtafanad bacooM vum 

and ndnortty lownret* 


1339 

185 

22 M 

1149) 

2290 

4J3EZ 

1459 

VW 

414 

W 

61 

21281 

' uin 

3280 

(2011) 

(40) 

— 

19440 

X3S1 

32W 


«0tB. 



2am 


NwpmcaattaofthL 

edpuaseo and essn payments for tna 
Psyuo Assets (based oaaaenhreigo * 

of*2£2»£U 

ArQustadnatr 


Tba 



of Coanon Sum oT Attanfia to ba booed In cotaecttan taW> 0» aancfloab 


Of tire OroroftSB pi o dB B B— wribLEOuraBwcaB^droreo B— and a amber 23 aftaaroregsactad to ba on-stream 
\n Miy ^^04 

The foBowiogtaWes aumiaaaas the pfadocaonaaamixMo to lira tateresgoerpadbrtiteGrcgpctafog Drag yeeraraidad 

3bt Decombe*,1981 3— 

Yaar«ndad31ctDaeantaa 

1977 1978 1979 1980 19S1 

Oa(STR> 1A10 1261 2283 3244 6235 

fhodocthre w*»» develotred by tha Group are placed an production as aooo as praafcabla. OB and natural gas produced 
Is sold ai the wslDi red- OB prodncllonifi Alberta I* sold to the ABrerU Pettotatan MartattngCooKiilraian. and etaewfaet m w Caneda 

and the United Sates to focal pucfwsws. Nat u ra l gas is nonaatiy sold under (ong-reno conuact, ratirar on dre basis drat the 
purchaser takas each day a speafled propartOB ot lire atemaiad reserves of a panJcuterweti or that tin purchasar takes an agreed 
vohmia of gas overs fixed period, d i— a of some of the fa ct u m cun aitHy affecting sales tti tire Gtoap'a ol and gropso d uctiQB 
are daacAed uadar*T1isk Fmaors read Moray Ragnlatloor. 

Futura Production and Estimated Nut Cash Haw 

A prelection of tin ftnure production and tire esn’naMdundac o ua a dPfCMb flow tan ftp Gromftapwvad off «dgt» 
resenree as at 31 k Oacambab 1981 ta set out below 3— 

ftafnctioB Cidiuata d Uo d g co t ct ta rf W Cab Ftaw 

A&mta 


Year testing 

OH 

Gas 

OO 

Gaa 

fiovaBy Capital Re- 
TaxCredrt (jotntnena 

Tatar 


- (STS) 

(MMcf) 

vooo 

two 

srooo 

raw . 

VOOO 

1382 

11200 

57 

284 

137 

66 

(279) 

188 

1383 

• 13A0O 

316 

377 

783 

300 

07) 

1243 

1984 

13.700 

374 

442 

1JQ34 

371 

(23) 

132* 

1985 

13200 

3S0 

494 

1.134 

381 

(24) 

1365 

1986 

12000 

42T 

538 

1/468 

489 

(3Z> 

. 2.463 

1987 

11200 

474 

559 

1283 

617 


3359 

1388 

10200 

477 

571 

2.112 

665 


3368 

1989 

9200 

484 

372 

2279 

715 

— 

3.667 

1990 

8200 

457 

S61 

2A4B 

752 


3251 

1991 

8,000 

460 

534 

2229 

775 


3338 

Thereafter 

•52400 

4289 

4229 

41284 

IZB&f 

— • 

59367 


165200 

1841 

9,641 

57271 

17205 

(05) 

84,463 


Nat catii flows from propartias local od in tire United Ssatas hay* been contretiad to CasacSan doHetsat tha rate of <31.183 
M USS1. Net cash flows are stated afire deducting att applicable roroUas. tftect raxes, operat in g cows and future capital 
raouiremana. indtaact costs, such as adrafn wre t h re mroriraeds. mtacaBanaotB e xprera as and incoore axes have not bean con- 
sidered. The Royalty Tax Credits expected to ba earned in tire Province of Albana barabaon taken into account on an aa&aatad 
basis. For the propose of determining tire art rnered net cash flows from the GroupTs proved natural gas reserves ft has bean 
assumed that approvals wfi be granted by 31st December, 1982 until respect to app&cafaons lor export at present before tire 
National Enragy Braid. A summary of the bases on which tire above net cash flows have beep caictilaad Is set out ta tire Btain 
Report. 

JOINT VENTURE MANAGEMENT 

A major tea a ri a of the badness of Atlantis Resources has been Its a&Bity, timogft tire ataftig of {cant venture capital, TP 
flaanca lire exploration and devetopmem of oil and gas prospects identified byft.Aitan&s!taamfrcat las to date acisd as operator 
undera JointVenruroA«jTesm«nt*.3 wfth consortia ot Cansdtan btn£tasaod5wfth ABrerta Smhed pareraoMpaaiBapisad in tire 
United Kingdom and conatodng mainly of United Kingdom investors. Die Catratfen aavestos ware Introduced prindpaJly through 
F- H. Deacon. Hodgson Inc. a Toronto stockbrokhig firm. wMe the (hnhed partnerships were arranged by Craigmount Imrest- 
roent - Management United (“Craig mount"), a London Investment management company. The Bmiad pennaoMps am 
administered in 3 casas by an Albana company, Agbicourt Resources Untiled (“Aflincourr), and in 2 cases by a U JC. comrrarry, 
Cla mount OR ta Gas Limited (“C ta rem o un t”). The sole buefanss ot these companies. wMcfa ate the general partners In the 
irei tner ti tipfclsio im xesrert the p amreafato sln their reiattonsftipwitbAltentis.Deraflt ot the faiereste of tire Oltoctoa and ofllcera 
of Aflsmta In tiwao comoaities and the various Joint ventures are aat out in paragraph 4 (i) of Appendbc 4. 

Under the Canettian joint ventures each lota motor* to obilg ad to pardcipm in even prospect whidi Atlsufls Raaowcas 
locates or acquires la Canada oc tin United States. imtB afi the Joint veatute cap it a l haa been comrotarei. Tba Joint Vhuotm 

l white pertpaatriD capital rematas urn 


Atlantis Rasourcas loeatas or acquires in Canada onha Unitad Satas must Pa oflread to tire parowrahips. Each i 
wvtewad by JrtiM Btain Enginaaring Ltd. prof aasional anghteora bi CMgsr, wire act as iodepandent pahulaoin anginsan to tlw 
psrtnsrsfilpsand tare a report on tha ptauned dMEag activity* baaed on lire geological data provided by Attends Resources, if 
the report torflcatasibat the prospect wests onataj ns s cr tee tl economic criteria, tire rawpea must ire accepted bytho \ 

ship. 

In certain faint ventures the Investors are reepomibia for 90 per cam. of oH exploration and dsvetopmectr 
find acquisition, setamic. drilling, completion and equipping coats), lo dm odrar Joint ventures tha investors are reeponaible for 
100 pat cant, ol ad expfawtim and dwsfaemem costs (Inducfing land acautaftiMt.safaudc.tMBng and txxaptatiou costs) and 
for 75 pet cant, of aP eautpping and ooarating costs. The remaining such costs are borne by Attends Resources .whiter haw 
Nsponstaie lot aQ cosw rotating to the OMnagaroeut and a d i ninl stia flu ri of the driUog p iugraatmes. As operator Atlantis 
Raaourees Is responsiNe for cororoIBng tha drfiDoq activities of tire faint ventures and fa particular it haa mrthraitr in rteatlon to 
the acquldtion. exploration end devatepmwn of oH and gee prospects, fateudfae dm nagotiadon o itarm^uta, terroJrm and 
royalty agreaments. In return loc bs services and axpantaa. Attantta Resources earns e warkjng mtereet of up to 25 percent, of 
tire ioiirt venture's mtercsi m ascii prorated. By fltis method the Group Ires been able to arxnmotata most ot la existing working 
Interests without having had to nsk substantial capita] sums on exploration end development. 

Under certain of the Joint ventures Attends Resource* tectavM management lees amounting to 7 per cent, of Tha total 
cawtsl contributions to each Joint venture. In addition, as operator Attends Resource* receives lees In ac co ria nc o with tha 
terms of standard fadm&Y operating procedures, ft it aoridpored mat in the current year management and operator's fees wUI 
amount to apprax&mwiy * 800 , 000 . 

Tha aggregate cont ributi ons ip tire 3 Canadian joint ventures have bean *10828200, of Vrhich S2.734000 wss iro- 
expandad at 31st Dsoatnbra,19Bl.Tba4 paRoetshte organised in the United Kingdom prior to 31st December, 1981 raised 
total cajtitai of *17,597.000, of which (729&000 was u nexpen ded at that dta. Apart from tire tied Canadian Joint vanture tha 
vartooB programme s ate son hi Drogmxs and tire uoaxpendad funds wH be spam in continuing eorefaratfon and i 
during 1882/83. 7 !m toUovdoa to* JutefsaDtreny of the rewfts of tba Joim uaBMtaPpv 31st Decambei, 1981 ; 


Estimated 
Total drifiiSB 

Noiof connajuti otts gapaodtasatn 
by 31st December^ 
1981 

• 9 




Canada 
Joint Venture 1 
Jofat Ventura 2 .' 

Joint Venture 3 
(Jutted KBtffdom 
Crelgmount-Agl n cor M Energy 
Partnership 1 880 
Cnlgmount-Aeiacewit Eoeqjy 
parcreatup 1980 
(Second Program) 
Cnlgmoum-AgtocoU it Energy 
Ptnnerdifa 1981 Gv) 


tret cash 
flow from 

Other Unexpended taaenr e a aaat 
capital 3taiOoeagiber, 
00 1981 

• • * 


G> 


13 


62 

72 


223800000 2.138900 
B22B.00Q 3060900 
3286 00 0 607,000 


lapnry i •jrvwpn r i 


SAS3J000 

4a aaj m 


2.7891000 
■ 113200 


paiBoabtaisei 


ASIftOOO 2455000 


201X000 — 48,753200 

1^73900 532000 39274200 

516200 Z1424XX) 8J944200 


981.000 5TEWJOO 3%08(dX» 

998000 TjCmjXD A9/3ZPOO 

414000 40D9JQOO — 

48SJ300 1.03X000 3XS3TJ»3 


224 « 7tL42 3J)00 *1326X000 *5. 1 2*000 81X030200 *20627X000 


ttotaas— 

(0 Oftsr axpendftmas cscnpdsa piadnp agransT and btokate’ 
plus other noo-drSing espial expendUura. 

(H) tmexpsnded capital Is ra m ad a tt ar deducting aft esriaratadddatag and < 

(BO Thta tarirafoa furt he r contributions by p ar ilLlp a nts in rerarectcfi 


btitial i 


as and adt ntatabalte n feat 
tacaaadu3TsLOaoarub«t. 
of *3 3 X 0 0 0 which are payable 

Gv) DrftEng commenced fa December, 1881. 

.. |A farther Joint Vermne Agrserasnt was entered into on 5tb May. 1382 between Atlantia Raaoorcasanda Cnritedpratner- 
* b|p. C l et emnum&iarey Partnership 1982. Ths tel contribution by p a t ti c ip ams was S2JKBL000. 

In adretton to tire Joint ventures described above, a Cansdtan pubUo company has tin* need a drilling programme bi 
wmwroQnreda operated by AtianttaHasourcss. To data total expenditures on tirisdrUMg progra mme have boon apprwJmttehr 
HJ OOttO dln return to rlteae nricss Arteritis Resources has earned a working (Merest of 30 pwceoL of tba bnareat earned bv tlret 
r rowvro arcmuTs o in the bnarear earned by Atlantis Resources have been included in the summery of reserves 
W oh jm uis nopanw m hi dm Btain ReoorU 

■r.. t !. ] ?!"■ * otl,c ” •* drgng ffaanca through faint vontoressref Mirer maan* In Canarta and 

th a United Kingdom and are also exploring ths pasNMHy of aUng finance in other pans ol tbs world. 

DIRECTORS. OFFICERS AND MANAGEMENT 

, 1 ,. President ani Chief Exacatisa (Xf)cg of Ariantta. Ha has been fcreufvad Ira 

tfi aodand gas te dust ry in wastera Canada and olaawbere In tha world lor over 16 years and has had c o n siderab le axpreianca 

5?" 196 a.ro 1 987 M r. Paytrewasa tandman with Pan Anrabcan Petroleum 
Q uporatlon ( nowAreocO) mCtonade.in l^O following graduation from Cotumbu Urmrarafty ha fataad Kmr-McGsa Cmgoretian 
° Ty and t^kyH^wntaT tn tfaa devsTocme nt of a s utygenttei nemrar gas prospect fa Texas. Between 7971 and 
1978 ns manage d Hite *a Cwadteojt.ert dwi lo refan operations of SuontagdalaOta Umtod. dmtag whiter pure he was involved 
j? ** mrh n J ^ l, Wo * tl ? S * e yti. ** A ra b ian Gutf. In 1978 Mr. Payne was Jmelvad fa the fotnmtioa of 

Jmj »" **»«* Of Surmfagitels Ob Limited. FbSowlag the 
. 1877 ol 2 od e nd gai nmpsnn. Oia.nama ot the ccmcsov was Chanced to Sceptre 
of t he tudsrge d groop. Pdf. Psytre resfaMd as Presfdeorof Sp^rtM Raeouces 
^ to * ttd _ g ? 0c,ob ^' Wtaygyaa t hs araMabad Artantta Reaourcas. Me. Psyns bag enraredfato a 3-ysar 

^" C * *” d hr<m Pa ra g raph 8 of Appendix 4. 

in - Ao> ?- 1982. Hs has hed 45 years' sawrtomre In aBandgas«mi»- 
^ Europe and the Norm Sea. Me. Dv* it aa^ American dtiasn. 
h?? 79 ^A O1SS0haw " and UJC. JWanaaar of KBreriMn Brotiiwa CMtaGee 

L^dmid during tWs period hs was on two occasions appointed Ptetidtm ol tbo United Kfagdon Offshore Opatarcre 

and ?' 1$ S*2*£** *!! *HJ!mead for i O va ara hi tire torestmem br^nexs. comreobatiiv Pdewify rat thaoB 
StfltiMitaSta? **" To,8n “^ atoctaottis^ Buaof^ F.H.^ Datexm.: HodgwUrc.hmdPBB^.aeoclaiad 

r H^^l^ W ^ b ^ aPto ^*^faW1 3 82.H8haaoft± W 8 B ti«BNa C taBanrtratJrerea. 


Intacreat31sf D ac tan beblflBI _ 

Coashtaration tot tire aegtriterioa of ABintia Ba wprcaf 

CrreaktantiDn for to acooWtion of Ab^ tatooteoa 

part conaUraatiUD for to acqataMoa of to P*yn* As*M» 
land to catf tar ran of gtactas 


Mo. of Sham 

iXmooo 

ijndjow 

1290267 

ajooqooo 

SOjOOQjOOO 


tooomrttetaortoPteroW.ta.reKftoptotatnoilato^ 
hr nr-"* **««» wahew.adfaraaditetasroti«va»unonaf s2X8?1^00 sqteval rea ra M26 (W M^W to 8^ 

Tire acfli*ladn*t«re*w at valuation sat otertova do not tacto8*vNu**towodmgta5*ra*M*«n*tiMi6»o*raw*d«»*toBa 

otwrptexfirore of tha siOXXSLDOO Joint venture c ap ft a i . vriutei b«s Wto D* ■* 3** Dasatom. 1961 o* to tifiCAXw 
Jobit venture capftei relssd In May. 1882. __ 

‘"tifwrmmitYMhvwiBManaieefhagaibflBw. wMtens iaui a cra ti»taqaa n * w6 tiutiiiBlfc*3>— M ab flnB 3T»tD*>^iiIi*i» 

1984 The summary make* to toBowiagpttaclpelaseuiiiptiOMi— 

(a) Salas of o8 and gas wril ba on to bails of to production oroflla from pfO**diMareMW6««9toatapa S6f to 

Btain Raport. No reronoawa be wcahrad trow any tree* ori at gaatita c avited. . . 

(b) The preaem rama of royalties and dbe« tax** wNtatnMnueohanoadlhrouqhtref tirepariod. ^ 

te) Ariantta wUI contiooe to raiaaioliri vatnure capital to ffaram toavp l i ira li op and dtaf te op ui a nf « ntiafpwapaci«.€Hit 
el wtrich tt wlU In certain cases receive management foes. 

(d) Timcaab tarawmaof LaVato iatwin bsaymriablatoGrcuppBroOto. m amriiBtehi ^M 

<e) Tire rate ot extemga bat e ro an Canadian Dotes and Uaftad Sara* Duhra ran Dp oti J iPill to HMUalBP 01283 

toUSSI. 

No dhrfdendsWaiba paid tar ABsntta dadnafta period. 


(0 

(0) 

(h) 

V> 


No dhridends vno os para or Anantra anting are psnuu. - . . _ 

lotarest on the cows bank loan will ire at to ia» of 20 pat oat pro map* to teA Iriita raH SiaCbs MinU 

before Slst Dscsmbat, 1984. ’ 

intanst wB) ba wetevad on cash supftua at to tats of 16 Mr onL p« tam 
AtiaobsT cuoant staff lavai wUsanram undraiigad verib irengal nliry mcraarea 

Yarn *adtao 31st Oacatnbar 


Cash receipts 
oriandgasravaotre 
N U na B tmantiaaa 
Prospect fees (Note) 
interest and other in com e 

Alberta Royalty Tax Grraflt ^ _ . . 

Goaanuirant Grans undar to ntrowsn uxardn* noBtanre 
Costs recovered from Joint vaotmo* 

Cash and shon-Mm dapotelta oo to assumption tot to transaction* 
sraaoonad haralp brow been cotaptatad 


Cash disbursement* 

Production flXMfll if 

Ganarel and a ri m fras t iot fite axpaatae 

Interest on bank loan 

Cost of da va taptnswtof proved mm 

Federal rfliset productirrepK 

Corporataincooretax 


Bataoea avalabis foe reotkfog esplM, ptoadyfoc on fa foitor 
devafapmantapd aaptoiation 


VB9 

4288 

69 

868 

300 

283 

78 


1.385 

2203 


1983 

«D0Q 


1j684 

OQO 


217 

60 

360 


2817 

281 

720 

300 

99 

272 

28 

1J679 

1.238 


1886 

¥000 

900 

2T7 

302 

200 


3^80 

319 

800 

300 

28 

300 

28 

%** 

1JB0B 


#ata:—ln 1982 Attaods Raaontcaa haa tacaivad S20R0Q0 aa rmririarefi oa far granting fooUrare to right » iraiiktato 
in emtain of Its pmspacB. 

The Di rectoncar^dra tot in iba HgM of tire above estimatsd cash Dow, on ilw hates of hsptasanlxctivKas and MMWbi# 
ths Group wN not require «> Mae additional funds within a period of 2 yseis taato data of tbta dowanantand wta dertire 
aufSctant funds from ft* gross rensuas to^ieroJop Us radsitag proved reserves. 

PROFITS AND PROSPECTS 

The Accountants' Raport sat out to Appendix 3 contains combined conolhtatad statanwftta of aatrifags for to Group 
for the Bve vans ended 31 at Docambet 1981. The year ended on that data was altered by the toteusfan of to nsufts of La 
VaRoirei and In addMon ganaral and admHHratfve coats rose as ths number of emtrioress tacreawd and Ariantta Haaoprcga 
bacaina more favahred In joint venture ftaaoctag In the United Kingdom. 

The Dfaoctora are g mfl da n tPtetrireGroup*amanagamsnt and aonlor staff, who have an as i ali JW red rectref of iBsc o u ii MB 
and devvtaptog ofl and gas pm sp e c t s ; win ba abia to bidM on tha growth of meant years. Foflowtns ttre aerpritettom maotionad 
harem tha Group wJH have a balanced portfolio of oil and gas tatensis. soma ot which are already producing white others have 
potential for devatorewnt. Tha Oirecian, as waft as davaiooing oxtatmg imaraats, Irrtand as a orajor pait of tha Groupfa bustaestro 
continue to pureue tha policy of arising Joint venture capital with whiter to finance to PxpUnaboa and development of MW 
prospects, both fa areas In which to Group Ires prevtorraty opereted and In other areas. 

The Dfracacwf present Intention it that revenues generated from operations wiH he mad te ftoanen tba davatopment tart 
expansion of to Gtoopita buaJoasp and tbay do pot, ritatafare^ antidpata tot any toMMda wfa ba paid by Ariantta ia to 
focasaaabte httare. 

RISK FACTORS AND INDUSTRY REGULATION 

08 and gas exploration Invofves a high deqw of title, wtrictaeuen « crxab in a6oo ol rccpedarica. towvgte dqa arel cateftri 
evxtorton may not be able to ovenarore. There tt no a s s uranc e that ateflriocal ofl or pas Hi co mn rat cia l tgiantitte* wg be rita- 
covered by to Group. HaaMbLsuch aa unusual ot unexpected geofagtai (on 


are Involved In dititog and operating wefts. The Group mafatefcra insurance fa accordance with standard Industry practice but 
nray porrattrafree become Rattle for damages artatog from peftmkm. blovvouts or otiuu harerrta. agarits* which It carwot ftau* 
ot agtost whltet It puy elect not ro Insure because of hlgb pronriunt costs ot otter reasons. 

The nrartcetaboty of oiloml gas ivMcn may baaoqufred or dtaaovend by to Group wBf be affected by nttmerotB fottore 
beyond#* Gimp's control. These tews inehrds matkat Qucbrations. the piafontity and capacity of 08 aod gas pipeSrtes *nd 
procaretng eqnlpnraotand g overnm en t raguiations. Tbs effect df aies* faaoa cannot be accurately rattBctral, to atitiitkw.at to 
PMAf time than foi a surofos of oroduteblB rratuni g» naenrae In Aberta and BMtei Columbia as compared w»t oretert 

Csoadlsn draand and acranflngty than nay be mna delay bofore natural gap seta coroactsaraobKJiwtf.AlitHiiah tire Nattanif 

Energy Bore * 1 h** ncantiy announced- less atiingaia surchra ts&s, tore ta no ■aatwimre that to Camteen oownmani writ 
allow Increased exports at competitive prices. There ta also oompatfrion between the ot) anti sea Jmtomy aad other Industries 
with respect ta to supply of energy and fuel to faduantaL camrearcM sad tadl’" 


The od and natural gas Industry operates In Canada retdvr Federal end PmfndM lagtatatiort and i 


unB ^Vulcb 

tand te nure, tax ate toyaWaa. production rigma. priefag. import*. ^mnwra ii^«mwnu^ and tomlnattaa. Pricing Agtea- 
mmrts batwaan Padarel and tovamal govarornents requtaro to price trfoU and gas In bitet-provJncM aod e x port trad* and to 
Fede ral Gov ammanutamigh ha agency, to National Enragy Bored, tagtriatea to vofama ofoB raid ga* exported from toreda. 
■TbaAlheite Government, tnrough to Energy RtorooeaConaetvBt to Bnmd. ra | |iita t i a» to nia«bDtmiailBwable rat* teBtodweflan 
5?" “if" to Produce of Alberts and to.qoantffla* of inch products which may be remand from to 

Provtoca. RagatstuY boctia* In other produefag Provinces to wtrichtho Group apeane perform afatitai fanedans. 

te tatetion trae bean _erracted and ta pwppaad route ePact ro to National Energy Program. Tbta 
reopened leghtatfan tateodas tavMoneto the rota* res pec tin g earned depletion allowance, new fomra of warn at 
«w* » fopgramme of g raduate incentive payment* for entities havin g certain terete of Canadian ownership. Tha Dtrecton 

ba tiav athatfaunedlatidy following to tren aa ettons tiweribad barela to Group wfOgoaMy for tosetelov ren ca* and ioca ml vea. 

Pursuant to the provisions of ttre Pi Icing Agwamanu> whltet are to remain lo effect rail* 31st December. 1986, the 
leap acdve governments ftave agreed not tt tatrcdace lutthatiattea. tomtit* ot tayteapaoMlo 10 to ofl and gaa Industry QOrat 
ton move s et ounp the Agreemems. Moreover, each goveaunant has agreed not to alter extetiag turns, royalties or exo*ndtoe* 
j" ■ *' Mn °2? yto yitiriy reduce apgtapate revalijoaa flowtofl to any other lever of gorertwrant otto to oil and gaa 

teuariy . «r rca to P ricing Agreement between to Prcvfaca of Albana and to Federal Govaramant, th* rinvnnirranr of 

Afo rata baa prcpte d a pfan of lircantares and toiralty reduction* daaig n * d to facreaso to agttmgatarevraroaaBBwIau to tnoo* 

^te^. R^ufytoFmtera 1 Gowomroaot ires announced ratiuaioBsin canata taxaaratd lacraaseolo tiraptioaaof 
IJEVAUOMBT COMPANY LIMITED 

l“tev?ralier. I960 Atiantia Rraoorcea porteretsd 118.000 Otdbsty Shares of La Vttfenet. aa to ve atnraaf mg** 

Corporate In Jaaay and Bated on The Stock Cp c h a nn o. la Am*. 1887 Attends Reaourcas purchased a tenter 12 tKXDOO 

Pyritoreg awraatf to VaBonat to n i fi2B Oa.teBowlBgwtricft.ta ac co r danc e with ttnta 34 of to Cfty Coda on Tshe^aSatid 
Metgra, fturada awh oftm- at48p pet tore for aU to OrritarayShanra ol Lo Vaftonet wblrai ft «d aortirea own: an to aMtftv 

ot La V Monat to resp ect of which acceptances were teorived were aubamuentiysokHo Mr. D.CDmcotl in trust aod CraJonroum 
fa e qual p roporto ^As omratit Attarnj, Ra*ourca*r»wewm1^0OOO»tifaaiya»«tti2tfaMSrof 

J . s to , _to VbBonat on Th a Siocft &tah*n^ ha* been mpamfod. it ta Intended tot aa sonata 

pnctfcaDM Aar o«tmg* wi AttamSs thint commaoom AAunte urtB owta m oft&r & aemirm mU lfw 8&1J200 OmtaM sums 
of u Vattmwt not ownad. bv Atlantis Rmwa Tha corafatelltOO m d o thi onarwHiM bo ineh numbav ef ftimn i a. 

Brand aacudtteawhha oradretvalrraof Cl 73J70Q. La 

ta tire Joint yrannrafs-non-reaatva a* and m* Prope^attotdS*^ tmteraowa iSa2SlteSrJ?Sin5rS2 
■qara ga t a vain a of to Grooo'a Iruamat hi Hanaftareaereet 
aod in HaOsfta nonraaaravo properttaa (baaoti oo 

taclototo-T»airo<toftoperto- QD ti„ B tt t raSnSodeOfa^;SStaSS.^^^ H ^^^ W ” h “ n0t 

APPENDIX 1 , 

^fJ fh e Mo wtoteacopyofa Raport Pretamtorral DtfM re il ~ 

Atiantia fteoUttM fo—Ni Ud. 11 oti5£!Sil2aSf5fc 

1 st Join 1962. 


t. introduesfon 


. n i wraw t " i n ro re^ roB h P P amto M rafm.rtairaDrarambarviaai foreteaMa, 

■ta autotrar maenrea alpfautahla lo to Inaamara to hm *- Ag-nfl. n.tnna-ra tate. 


In 



J'iflandal Times Monday July 5 1982 


««ng ta Atartfa d«ad 

no fMfl romlwHkHtt hava bnm mada - - »reJ>e«od > on a 6™*“* »hjftf °* ft* ratevam properties: hwnm. 


noJWd wnmjBrtwjt ^ ntfT JSmTfa 8 !!, ®* retoVBm P™P«to*: however, 

bpkntjon Lnj.nrf juu i u _ _^ _. ." ™w*™* ™ *0# taw conducted, aims Resomces 1 w* Azlainks 

fcuvfl Dives us nr-i*wi to «h xbat nxmftoiand ccm w l ofi nd oas prodonloa 

*"« tan «°* «"6>"»*to9_ristn «„d raacra. such w aSodThitaSS 

»«"«J fovn S» «5frt «^^floSB5aiito for toe wafeertSta^ 

«***“. . d H i M£ 2 M ll £^^^ «■** ** ***“*«* 

«m certain cfianra ». w S»S , ^^SLT ltc ^ 4^"** R ° SO UfC ^ > u«L has entered taio Joint Uontuw Agreements 

8Wn * ™® W** &»* bufemtett i as to ownrmhfe management uni pMontaoTjota 

Clw»H»c«teii*fii«va> 


j 2 ! 2 ^ *•“ «»«*- m«B 5 

•ij »«™< m™?S^ 

Cf provod *** <w,D “ t ** stKMJW not be etxtstruedss being exact quantities. Kutnatoi 

Bo Bgwa H8 ^PR>laMo anras m*t tottoaao or dacnraa as ■ result or ftanwopaatiDDB. No estimates Hava bean made tor 

% 0 « ri OB¥ 

«■ R«wW» ' ' ■■ -: • 


. PmfaKfasUMb 

MctBtuuKuBtt 


ALBERTA 


r ■■ ■ :■ 

m 

■ «sra> 


a&mtiNfJVHGttftrtw 


tUnmU 

torn 


Bbeountadat 
15 per cunt. 
7000 - 


yuscHak 


ss 

SHBK MTCHBM AH 

(aohlaki 

WKnaJuiA 

Emma Wand 
■ Untatem 

unaaCamr 


*j».jMh Atg> long ton of Mriptor tuons am entreated to bo atirfbutabto to rw«nriH, Aborts. Tho esOnatad 
M oMfim MAua^to ttaaa wcaivai baa boon fnducbaf In tfM abovo flgqin; 

to? Tb afoUood nataMoafaoiwatbamitprovod raaatiMataitaatamattaitacsft Bow from write which rfimtounavaa- 

«*» « gas purchase coronas an not aoBripeied to commence production before May, 1984:- 

- ilQBo PMrfarii gWrih 

iWtf/tosamn OUmsted Nat Cash Fkm 

WaBr after AryxAfa* ' ...... fifeKwarfirfaf 

_ Sh Vttdkcttmrtad . 15 pur cent. 

. flaw) ro» root? 

*“^,■■.-■1 - ^ * a — • 1/W3 11AW US 

^MftmalVllBQlB 3JB30 B3S 

BRITISH COLUMBIA 3 - 4338 . ' 210 


(O) TtafbfloadBBttHoritoatlbanMpnlittAPi 


tanf Aa afftaMid natcatfi flow itomtons 




No. of 
MB 

Nut ftusmet attar 
ftorattfe* ' 

Estimated Nat Catfr Hour ■ 
Discounted at 




on 

• • - Gas 

UotHtcomded- 

- J 5 per cant 


ALB0TTA 


cm 

OSMcO 

* 000 

7000 


Oft) lata 

- 1 


aa 

226 

20 


CroeefieU 

ICO 

mourn 

38 

258 

36 


Cygnet 

■- 1 

tarara 

35 

156 

34 


Earring 

1(1) 


• 68 

-870 

70 

■ '•! 

Huxtay-Soato 

GO) 

14300 

1328 

1%4tt> ■ 

1382 

• • W 

. Pteeatono 

IO) . 

amom 

30 

108 

38 


. . PtaaCneK 

BO) 

92JW0 

30 

3,010 

397 


- Sylvan Late 

•3(2) ' 


701 

6,166 

753 


. _ . WBecdon Groan 

1(0' 

MM 

40 

' . 27B 

41 

T -^s?a 

Wofl Creek - 

" 'ICO 


BBI 

0971 

614 

1 * 

2ama 

. Atberta RoyaJtv Tax Credit 
BRITISH COLUMBIA 

1Cl> 

. <M 

S3 

■718 

0060 

96 
' 1^371 


Eagle 

10) 

mm 

43 

169 

27 

'vj'i 

Hohnan 

1 

a mm 

142 

672 

-86 

’ ■ '-Jr 

Tanaka 

- SASKATCHEWAN 

iw . 


• 348 

1375 

IBB 

~^TT 

ffrntfiif 

LOUISIANA 

in 

tsjno 

“ 

227 

99 

— 

EogmHknd 

in) 

— 

38 

461 

60 

«. . 

.T -ZH 

TUTU. 

26(19) 

62.000 

-■ 432* 

' 37.441 

5300 


Tho mnhar ofmBa ibewa la bmAats WTatea wtfs to wMcfc wovad n woB as pnhablo taaomsliin bm attribnfad 
•Bd which InvatiWiBfora also boon iacioctal InltM numbar of write shown In tba taUw^f provad raaonas. 

WWW— 1 

0} Con do t mtB TotaCTMhawboenfnclattoiltn ot«olnniaa.vMchiiT«iprnantBdtq standard 42 IK gtBnnatocfctanfc taunted 
Gaa voiumaa am mpmoHd in ctendaid^ cnbte fait (1Afl5 psta and «I*R. 

CD> Eadmatcd not aati flow wtaosara prmamadtn Canadian doBm; ptopartlas located ht the United St at Ba bai nflcoofarfd 
to Canadian doBaa at tba rata of C*1 .183 to UM W» me mSnu « 3l*t Docambv,-1981). 

030 Estimated nor casta flow vataaaara stated aftardadoeUnflaVappllcaMaroyaMa. Abaci tt»»ai>anKhiocaati and ftnura 
capital mj i d i uu Haits. ErWBTprfcbig an d tn adonBPMrfneaaaownned In die CaMdlao Federal Budoat de tail 28tfl October. 
iSBOand intho Enargy f*rfctofl a ndftaatkin A t) wu ants dated 1 Hand 2*tb Sap t«m boraml2i8th October. 1381 between 
tbeGovarnmentof Canada end ttM Provinces of Alberta, BrMsb Columbia end Sailmchetwaii have been reamnbad in 
tbo^nvahislioit. Windfall Profits Tux ba9 been deducted from production raveooas attributable to United Steles propertfes. 
tettfreta coma. eucbeeadipftii»tradvBove»bwda.ml«cateieotM ein»e iBe»andirtCTnw tat have not been oonstdemd; The 
RoyaftyTtxCredte etnwidtoAlbeftatieVabeeOtakoalmDaixoun ton an wthmuedbaw. On t3*h April. 1982 the Provfaca 
- of Mbwta announced ebanserbrthe ProMneial myalfles with eflact born 1» Apifl, 1862 end to the Royalty Tax Cmfltt 
■with eBect1» oi n1«Sep wm be<.ia81.11iaae recent cflanflaa have pat been mcoanUed in iha cash flow vabwaaei out 


Qy) Tbe folcyNtnfl ol andc 
end probable naotm; 


tprtoa l oiacataliaaebeao wad btco mp Bi t a tba ab one erfmatea of nei cash ttow from provad 


UEpm 
. tfSIB 
2028 
2225 
28.10 
30JOD 
37.00 
4400 
8100 
caoo 
0X0 


tkwenvkffm 

9IS7B 

4420 

eojso 

S7£0 


Unitad Stales 
Crude OO 
USt/STB 
38J08 
40JQ0 
4400 



47.78 

6630 



6678 

7330. 

5630 


6040 

8030 

6230 


64.15 

8530. 

6830 


6730 

90160 

7430 


7135 

9830 

8030 


6 perctnLtocmn ewhyeer 


_ • . 

GAS 



Aim 

British Cotanrhta 

United States 

Ob* 


New Qua 

Natural Oar 



9/Met 

usi/w 

3.10 


136 

.230 

330 


220 

330 

4.10 


245 

a7o 

430 


2.75 

4.10 

5.10 


336. : • • 

4.75 

576 


335 

640 

630 


335 

635 

736 


33S 

670 

7 JO 


- 426 

7J3S 


6 per cent facraam each year . 



a.) Onjfftffrtn t yn tr^npr^nnarjuarctaarg ™*" 0 ™ 1 BsaltM10CI ° TCUnuJ,,CTJ11 

SSS^ required to complete, aottin and tie-in wed* have bean ht cleded and hawobaan adjusted wtena Wp HcaMe 
toreflect the termse? agraeniems entered Into br the Group tor the sharing of euch cMta. Future operaUweo«s and 
tattan capital expmfltune have bean eserfated atsmual rates of 1 0 per cent, tor the ftst 3 yaem, 7 par com. for tba next 
6 vea» and B per caaLttaMftac. 

* ^Tte^MhMtesofyearif pRtrtadlaafioa)t<iBG«»dkpRMadaitd probebtoimnasaMaai out briber t— 

■*" ,m PROBABLE 


rear ending 

Off 

31st December 

(STB} 

1882 

11300 

1983 

12600 

IBS* 

13.700 

1385 

12200 

1988 

: 12300 

1987 

11,300 

■ 1989 

10300 

1969 

9700 

1990 

8300 

1981 

2000 

Ttaroater 

62400 


185200 


PROVED 

Our 

WUef> 

37 

318 

374 


Sulphur 

OLoogtane) 

IB 

64 

84 


■». ^ tmt hw «wnt nee rino todennent in eaflmatfng datss of on-prodpeflon, pmducHontolea and product prices 

u — ■«. ex eppropdato. bexed on the otodnciion hbtory of the pfoooitjas 

ohemeterisdes. It should be iwegnlxed. however, that uncmMw 
btheoaandMtnduMivbWh^nWto andleielfln, mav rexuit In actual datea ol on-preductlon, produeflon maa and product 
SiSSta2vwf2™SlSi2n 5SSeM«dtatM* mowt. In view ol the Canadian gas raarfeadtiB condition* end the tore * propo rt hm 
rfj^' 5 »OT®‘bictuii®d in wane which are not on production or have noryet been completed end ptoduction letted, hbtori calttaa 
Sift^^toUwpruformenco Wdta town available ndiMs evaiualtoti must be considered ea a pteSnwwyeppnJeal 

SSS Wtf^ffiRSSSSTeSo^ toioiedtw whHe some o* *m probrtrie wenw weft warn «hed*2edlo«wiM^ 
d^a^Wteettm^dnaains ktoeiiatowella.itui«artwM "tay bedetened lor emnv yearn umUdedewHi of the proved 
nsema In ottienonee in tbe'atme mfl. " 

•* IU> vfemeMteiin» of tmrcficBTnMBticaewUch have ericmidicaSlatlleceinbec, 1881 which would rBtfl*en* to nato 

■ reatedal adverse ebenge to any WBie above llgmee. ... 

BLAIN ENGINEERING ASSOCIATES (1880} LTU. 

. - tofua/onriEogtaema. 

APPENDIX- 2 ■ ■ 

MINERAL MANAOEWHarr CONSULTANT^ REPORT - _ 

Tbefotowtogttteowrofa R^bfSMiaeOuidaR&A^ MlWmd ^ 

The PlrectOf* . ■ . . Canada Trust Brrihflno, 

Aliemix Resources (nteswtOMSU Caleary, Afi»n» T2P 1 B3. 

injtdv.issz. 

Oenttanen. 

•"^‘JS^^^fwMMwehMOvatoBtadasWSIxtDeeaiidW.IDMIheiioiweeeiwiollBmlgMWOBerdeareittutrtto 

• KSSMtoSS RWdtoes imeniBitonel Ltd. rAtienlitT) and Its sutakHerlee nho GtooO faHowmg 

,80 " l 22? r ^K 1 ? ££^2S»d«crfbed mttuTpiMpectoemletlog to Aflarrti. dated 1« Jtrtv. 1982. C3w erahattan leowwiB 
cmeptadon ol th a ^L^rr^Sti^s. of ftaraoliceaaat C0« of Ow bnamssat 31st Dacambet, 1881. 


our opinion. » ipdepattdi 
2. Bade at Vahiaflon 


EA*&WSSS2gZ^~ cuneot pri« w« oot mmBeWe in Ihb ImnmdUri. vtanhy, w. «ml our 
bgattudgmem. 

V "-iSSSSSSffi«rtW*es an ew*anent oTthe teriotmmart Wat »«t SIN DNtartw, 1981 
■Od intersem owned by aw Group?— ^ N^torowi 

Acm Abus Cost 

s 

KL5T5 10.090 IJJBAflOO 

fflffmtaHifle- 46^78 &S« l^aOOO 

Bdttm 0BBHM8- . go| S6 0,000 

Stnfcatdwrxn 33.077 20609 OtOfiOO 

UnBed State* 


*3X20000 


Yo u a v my truly, 

SEATOIWORSAN & ASSOCIATES LTD. 

UkmlUmgemMCoautteML 


APPENDIX D 
ACCOUNTANTS' REPORT 


- TimtoBowtoaftBewiror* 
TtaDhectoa, 


1200 Bow VaSey Square 2. 

20Mttj Avenue S,W. 
CrigaiY. Alberta TCP 2W4. 

1st July, 1382. 


,!l 


■IttcfiSloeKtat. to >c«&adw whole of die finned aftancapHale of AdanfisIleMltioeELKLrAdanift 

2 Attwdte tm«»ni«iredirrtO i^ n|y| , tH hi wmhenBe to Common Shame of ABantlt cuntfitfanal 

ReeoureeO and ^ tawto F^ tutnan mMtrine wich elwtea m the Official List. The reetdtnui tatsbieax comMna- 

(WeriT) on «ta ^ytmea ol \Ths»A L»™aSS!wI*?«» *eS Babflldex and equity account* ol each company will 
dona am accito^Jgl ^^^S lSMTh^th^ift^Spg^w^pvnbw and tpe K**hx at opepnloi* of each company wWbo 
be BKOided d'O* !*?***?. fa the enmouated cnUarpenta at aamings and Mdnad naming* mdcheagea in Dnandd 

diArai erf fcwonKBOtkXt <>X Attaotta Rumoeareca: 


*■ . The fttandel atatamemx net egt befaw comMna the ObwwM alal aiBe uli of Adantb. Altontb J hmtt i rt t a aad ASanda 

B«iamden end the pro fomm coraoUdaiwJ behmee sheet lncoq»Hrt» the eHectc Of »• tofflowfafl teWHetiom a» K they bed 
nkn ptoee on 31« Dacember, 1 9*n 

(a) tba issua by Arianda Rasoumaa at K.ooo Common Shane on tba exercbe of emdoyea stock epfloo* Cor on 
aggraBate corKhtaatlon ol *300.000 cash; 

Cd-. 3>e aeqtrixWoh by Ariantb erf the oh end mdinal gaa wopetde* onroad by Uu L. H. Payne far an aouagate coo- 
aMeatkm ol 42A90A97 to be sotbflad es to n^bOXlOO hi cash and aa to *1,380,997 by the Inuo ol y 390997 
Common Sluuva of AdantU ct an otcittiod vaJoa of *1 per ahem; tba acquMticmia conditional on the Council of 
Til* Slock Exchange admiaiBg the shares to the Official List; 

(c) the owe by Abantrt ofSAOCUng Comrocn Shers* at a mice of 46p par Shat* pungent to a proposed pb£ng of 
such *haw; the plaebig |x condlttODel on the Couoctl of The Stedc Evcbange admitilng the abates to the Official 

List; and 

U) the payment ol evpe ngw of *680X100 estbeaiad to be Incurred In c omptettag Iha tiansacilora ref erred to la para- 
graphs 2 and 3 of thfc report. 

4. Attondi Resourcas acquired u 38.7 per cent, imprest In a Jereey tentared eomnanv. La Vellonat Company Limbed 
(*te VanoosT). between November. 1980 *nd May, 1961 at a total cuetal *1.372.784. The exam ol the cost of this lmenat 
over the book value al the acquired net amen at the dines ol acanUtioo af *fi2&844 has bean assigned to oD and nature! gas 
properties. 

5. Wo have examined the pro forma consolidated balance sheet and the combined coraottdeted stauments or earnings 
and Minified earnings and changes fa founds! position am out fa peregnrohs 0 n 12 which have been prepared under the 
historical cost convention. They aia baaod on the audited financial st a tements of Allantic and Its MibsMarfca (“tire Group - }. 
Qnr amuninetJon was made h> accordance wift general fy accepted auditing Standards, and octottiirtaly in chided mb MS 
and other procedures *$ we con^deted neceaxaiyiti the cn cu >s* tsrxei . 

fl. In eur opinion iba pre tom consolidated balance cheat prasentefaMy iha financial porition of flu Group as at 31st 
Dacember, 1981 and tMcombinadeoiuoaditadsiMameiraW earnings end retained eanringc and cliaagee In firutntiilpoaftlaa 
present tebty Ow re sults of is op ere t ta s and changes In ffameial pcsMon for each el Die live veats ended on that dm, a* as 
set out in paragraphs 9 in 12 below. In accordance wtih gaiwraOy eccapud Bccoumbig prtnctptes In Canada end with tolar- 
nattona) accounting standard* ctutstaentiy anpKad after Drying effect to the pro fuma coosolldstad balaoee sheet to too nano* 
actions referred to in paragraph 3 of ttris report. 

7. No company In the Group has prepared any audHad financial satam enTiwaamwic n t MBl st Pacaalwr, 1381. 

& References in ltd* repon to Doflars and* aw to Canadian DoBais; 
g, Piofonm CocooDdnsd Bilnci 8 bnt 

The following baiancs sheet combines Dm balance sheets of Atimnis, Atlantis Resourcas end Atlantis Expfexation at 
3Ut DecetnUer, 1381 and facotporafas me mnsactions dasctllMd In patagiapb 3 of Vila repon s— 


CURRENT ASSETS 
Cash and sbofMarm dasodts 
Martrrttahla sacu rl Bes,*! market mho 
. Accourns recoivBble 

Sharo sutKdtptlans iseahraflte 


3L0BSL4BI 


FIXED ASSETS 


1WHIM** 

CURRB1T UAB1UTIES 
Beni; Indebtedness 
.Benklqen 

Accounm payable andeccmad SabBltiao 
locotaaiBkas payable 

DB^RRED -IlfCOUB' TAXES 
MINORITY INTERESTS 


Shareholder** Equity 
CAPITAL STOCK 
RETAINED EARNINGS 


3£Z3£8Z 

130X00 

" 7.147,308 
0X31X31 

iisjaBjaa 


581X16 
1X00000 
4227*723 
. 4ft878 

0350714 

S3XH6 

982336 


oes n . Ton 

74282 


10. C o robfewd cbnaoBdfd Stfnents of Eernhifla and Retained gsmtoos 

Tto eantings end wtefaed euatogt of die Group for tba five yarns ended 31 k December, 1SB1 were as foSowi^- 

Year ended 31 rt December 

iibore tost tarn ism ism ism 


REVENUE 

Oaeodgas 

Mmugemant and cpmuhtog fees 

In rarest 

Other 


PtodnmfM ' 

Depletion and daproetetion 
General mid admbtktiBthra 
htreaet 

Loss on treadadon of ftmiga enrsneies 


EARNINGS/(LOSS) BEFORE EXCEPTIONAL ITEMS, 
. INCOME TAXES AND MINORITY INTERESTS 
Gato/Cioss} oo'nie of mmkattblo sectuttiea . 

EARNINGS/ (LOSS) BEFORE INCOME TAXES AND 
MINORITY INTERESTS 

INCOME TAXES 
CUaent/tocovrey) 

Deterred - 


EARNMGS/OOSS) SHORE MBfORIIY INTERQTfi 
Mkwrtty imerestt • 

NET EARNINGS/ (LOSS) ' 

RETAINS) EARNINGS AT BEGINNING OF YEAH 


44.104 841 S78 

412338 388.700 200300 

213359 24383 • 0335 

18320 — — 


2300 75300 

~ 2.015 


088318, 390354 207313 . £300 77315 


17,182 1B0 — — 

l im 1B349 12309 B3 BR 

B193^ 221^ 201365 S301 

209.073 4381 4300 740 

88394 — — — 

827,792 245370 21B303 10789 


(140374). 

(61.170) 

1443&4 

jgg- 

(8388) 

303324 

67310 

2393 

(222344) 

144384 

61 31 6 

295355 

60303 

12760 

1031S 

15400 

(T438Z) 

15,757 

15311 

21 351 

13.139 

' 13J80 

28,718 

1365 

37462 

13,139 

(235324) 

' 19302 

119368 

GB361 

257393 

47464 

(216322) 

'290304 

<19366 
171 3S8 

56351 

111487 

257,733 

45448 

47464 

(2316) 

74382 

290304 

171338 

303341 

191.754 

45448 

<74282 

>290304 

*171338 

*111487 

<48448 


RETAINED EARNINGS AT BID OFYEAR <74382 4290304 *171338 *111387 <40448 

Tit Combined Coneondeted Statronents of Change* In Rnendtol Position 

Tba changae In IfaancWpasMon of tba Gnwptofffie five ycen ended 31st December. 1981 were esf oil owss— 

. Year ended 31sl December 
1061 1600 1379 1976 1977 


WORKING CAPITAL DERIVED FROM 
Operations 
issue ol shares 

Increase in woddng capful on ecquMtioa of shares of 
LoVsBonet 

Proceeds from safa of find assets 


— • 183.300 83312 •286312' 6038* 

130303 1A69397 215,100.. — — 


1371313 — — 

— 20375 17300 


— 2305 


2301316 1344.172 316312 2B6312 62370 

WORKING CAPITAL APPUH) TO . 

Operations. 210374 — — — — ■ 

Fbeedenere 2,111326 1308322 319399 97,568 36375 

Dividend — — — 1B13B4 — 

Purcheso of share* of LeVenoneC 1385383 107391 — ■— ~ 

' 3.7B7383 1318313 318395 ' 289322 38375 

INCREASE/fDECREAEE) IN WORKING CAPITAL 0388,147) 328389 (2365) (3310) 18395 

WORKING CAPITAL/ (DEFICIENCY) AT BEGINNING _ 

OFYEAR ■ 334,741 6.192 9.1BB 1237S (4320) 

WORKING CAPITAL/ [DEFICIENCY) AT END OF — - — 

YEAR *{7 351308) *334.741 <8,182 *9.155 <12375 

12. Natan to tin Combined Consolidated Financial St atem e n ts 
(f) Accounting poScfes 
(b} ffitfy of 

The combined consoBdeted financial ststamarta todude iha foBpadag*-* 

(I) the b&tancs sheet o! Attends es St 31st December, 1981 : 

CD)thecon»ndated befanoe ahem ef Atlenfls Beacuims east 31st December. 1981 end the eocwoHdated statement* 
of eantings and renin ad eamlnes/(dafict!) and changes to financial position lor the period from incorporation on 
3rd April, 1979 to 31st December, 137B and tor the yean coded 31st December, 1990 end 31st December, 1981; 
and 

(B) the bafance sheet of Attends Exploration as at 31 tt Decamber, 1981 and flw statanwus of aarofaigs and retolnad 
eantings and changes In financial position for each of the five yams ended on that data. 

Iha consolidated financial statements of AtbmOs Resources include the accounts of its whetiv-owtied sobadiary. 
Atientis Hoidhigs Inc. from the data of incorporalton and the account* of Its 88.7 par coot owned subeWiary, La 
VeiionaL from 80th ApriL 1SB1, the affective rtna of acoirisitlon. The excess of the cost of the shuts of Le Vellonet over 
-flra book value offta net assets at tire datra of acquisition Has bean assigned to 08 and natural gas propeoles and is 
artifact to the accounting poBclas set out bekw. 

(b) Marketable securities 

Matkaiabi* eacutUee are recorded at the lower of can ead : martet value. 

(c) Oil and nstwaigas properties 

The Group follows the full cost method of accounting under which all casts relating to the exploration for and the 
deve lo pment of oa end natural gas properties are cnphnliaod on ■ country by country baste. Such coats include land 
acquisition costs, geological and geophysical expenditures, costs ol diming both productive end nan-productive wefls 
end overhead charges related 10 exploration activities. 

The coats reteting ro a con centre horn which there fa production are depleted using the unit cf production method 
based upon estimated recoverable resetves of oil and gas as determined by the Group. Com In non-producing cost 
centres wffl be depleted when the area becomes productive or wB be written on to eantings if esptaaflon activity In 
' that country is deremrinedw be unsuccasstuL 

Substantially oil the Group's explora tion and production ccSvIties are conducted Jointly with others and sccordtagty 
then financial statements reflect oaiy the Group's proportionate interest In sucta activities. 

(d) Foreign ewtrsney truaxtiilaa 

The Group trenstaUB amounts of foreign currencies Into Canadian- dobis on the foB owing baste current assets and 
curiam ilabitttiae at rates of exchange prevailing at the baleneo ahem date ; other assets and fiabNtiaa at retas ol mcc&ange 
at the date the original transection* took piece; and nnrenuae and expenses (other Own depredation) at average rates 
of eKchartge during the year. 

(S) Depredation 

Deneclariaa ot (bead assets oilier than o> end natural gas prop ratios 1c provided using the Mowing methods end 


FuraRtsre and torture* 20 per cant, per srtrupp using thadecCnfag batenca method. 

Lmseboid Improvements over 10 yesra oa astatanKne besfa. 

(I) Deferred taxes 

Tire Group follows the tax cBocation method of eccountfag under which the Income tax provtshm is besatf on tire 
reported aamings. Under this method, Iha Group makes fufl provision for Income taxos deferred as a result of cWmfag 
central cost eBowencee and writing off egqrianition end development expenditures tor tax purposes la excess ol lbs 
related amounts recorded for depre da tion and de pl e tion In The accounts. 


00 and natural gas teases and rights, in eluding exploration, development and 

equipment rharaon 

ftmRura, fixtures and leasehold improvements - - 


Acommleted 

Cost depredation Net 
s • ■» 


8321394 

181.197 


8388 C315.70S 
44391 138348 


*6.702391 <50340 <8381351 


The hank loan is repayable on demand, bean Inmost at fire bank prtore rate ptare 1 per cant, and is secured by tbs stare* 
ofUs VaBoneL 
Ov) Capital suck 

taJ ^esathmisad capital coralsed at 31 at December. 1981 of 100300 Comtiwn Starra uritheuf nomhrel or par mhm.Afl 
2 nd April, 1382 the authorised capfari was Increreed to 28300300 Common Shares without notarial or per value. 

abates Qnfibnflbs 
-* 

Ar31s?Decanrisar,1981 3 3 

Asadfosiad: 

hi bostoess combination wflh: 

Atiantis RflSourcns 13395300 1399397 

Attamte Exploration 1.714300 2 

For oil and natural pas properties 1390397 1390397 

For cash pmsuamto the pisdng 3306300 3300.000 


Dstftgfc Estimated costs In respect of the a bo v tit ransa « 2 o n a 


*6330299 


(e) Common Shuns reserved 

Subsequent to 31st December. 1981 Atlantic reserved 750300 Common Shores for Issue nnnuant 10 an amptovae 
Stacie Option nan. On 11 th Jana. 1992 options were granted to 7 employees la subscribe lor an aggregate cri 460300 
sharra at si persfiare. The ootiems areeHBtctabie owa p^od of 6 years. 

(v) General and admbiistnihre expenses 

Gsaeori and adminisaativa expenses bidodei— 

1981 1980 1879 1B7B 1877 

Stiff 
Dtrectirnf reenuner a tfon 188379 1633*5 41366 — — 

AudHoa* rs ounwU on 17300 13360 7.400 — — 

(vl) DMdend 

The only drvfafeod peM doring the period indar nvtav was paid by Atlantis Exploration In respect of tha year ended 31S 
Dacember, 1978 end mounted to <191,764. 

(vB) Contingent BabStka 

(a) A* 31s December. 1981 Atientis Exploretioa wae «ertUngemly Babla as guarantor ef bank Indebtedness of MlUIL 
Paytifl to a nrardoumi of 11300300- This guarantee '*as releasod on 3rd May, 1902 . 

<b) UndefttHtamwoftha Agreement known as JaimV«iturs3If on complatronal lh« programme an Independent evaluation 
of the Joint Venture'* asses ast abti sh e t a value lor periicipenU > inlerests of less than 50 per rant, ol the total amount 
contributed by participants fa the Joint Venture, ps (rid penis wig be entitled to convert theh toisraas bite Common 
Stares of Atiemla Resources. The Directors da not consider that such entittomant wfll arise to favour ol participants. 
13. 011 and Natural Gera properties acquired from Mr. L. H. Payne 

The taflowtng able surmaa rises tho reMrinatiifinneble to the ou end-oatonti gas propettioett btocqnlrBd from Ms. L. H. 
Paynes— 

Year ended 31st December 

soar iB 60 tarn ms wt 7 

* * * * * 
Gross l«v«ttase 61373 48397 23325 13390 

RoyaMaa (21344) (19390) (16277) (4389) — 


Production awensax 


39329 29,117 19381 18366 .13380 

(8393) (3AG4) (1365) 0399) 080 

<31.436 S7MTO <18,416 <17357 <13,116 

Very fnrir voua. 

THORNE RIDDELL, 

r *>wf» i iiii M i t* . 


‘ATLANTIS RESOURCES CONTINUED 

APPENDIX 4 

„ STATVrORY AND GENERAL INFORMATION 

7> Atianta 

fa) Atlantis was i ne orocreted under the lawe of Attraru, Canada as i private company an 161b October. 1880 under tto 
naffiB ol 230Z38 Albene Lid. and on 2nd Aorti, 1982 cltangbd IB nomaWdSpresonf nemo. _ _ . .. 

(b) 0) Atiantis was incorporated wtih an unhoused share capital ol 100,000 Cormno" www* without nonrinal or pm 
__ vbIob. ol which 3 Common Sher» were Issued on 30tn Sememner, 1981 tot«w*h- , . _ . , 

(D) On 2nd ApiB, 1882 tho authorised share capital wu increased to 25,0003®) Common sharre without oomtaal 

nrpar value end Aitemrj was convened Into a public company. . _ 

(W) On 7ti» JtriY.1962, condHhMralhr UotereOdl on the Cooncfl of The Stock Exchange grenlfao a Bstino lor theCommon 
Stares, issued end to be issued es mentioned herein other than for La Valfanet. in s anticipated ttai A3antf3te«^ 
(*) bsue credited a* fuDy pefa 1,390397 Common Shores es part sonsidemtton for the ocqualtion of the Faya a 
A tmh i* 

(b)ltflie credited astuKypsW 1.714300 Common &haret« eo&sideaihw for the aequhailon of the Issued share 
caoftal of Attends Exploration; 

(4 bsue credited as. futtypaMl339S300 Common Shares as eorwlderation for the acqulrition « the bsuedSHM 
capital of Atiantis Rsuiurces; and 

(d) issue lolly paid 3300300 Common Shares for a cash subscription print of 45p per sham, representing SO 
ogpregaie subscription ol £1 350300. 

(d Saw) as elotesald. there hove been do mutations In the share capital of Atlantis since It* IncoipoiatiOIL 


(O Saw as 
2. Principal Si 


prindpel adxMarias, afl of which unless orhenrae sated ora private companies s— 


Nam bKarpondhn capital by the Group Bcrs JntO 

AflaaSsRanaroasUrL- Atoarta, Canada *1399387 100 Oflaodgai 

3rd ApriL 1978 

Atiudb&iploiatiooUtL AOrena, Canada 

Sth August, 1972 <2 100 00*86018 

AttantiaHoUngslaCi ' Deliwera. U^A U&S 13 Q 0 100 OS«ndgat 

28th July. 1880 

LaVaSonetCOmrapyUndlHS Jmssv CPubfic) £581300 SOZ fa ^ tmmt 

6(1) July. 1983 

Extract Wbol Holdings England (PuUc) £496300 BS.7 Dormant 

- PubfisUoltad Company 16ft July. 1900 

Hefiw Reaouteia Ltd. Alberta, Caiada 810 523 Oil and gad 

19th Match, 1980 

(b) 0) On Bth August 1990 and 24th Fribroary. 1981 Atiantis HoMngs Inc. Issued respectively 10 and 990 Common 
Shares nine par value to Atlantis Resources tor USS10 and USS9S0 in cash. 

( 8 ) On 15ft Se p tember- 1981 Atiantis Resources Issued 28300 Common Shores without nominal or par vain* 1 b 
taffeta of ha anploypsa for a total cash subscription price of <130,000. 

(H)On 21 it May, 1982 Atiantis Resources issued 68300 Common Shares wMumt nominal or par vaJua to caftan of 
Its emptoyees for a total cash subscription prica of <300300. 


3. Issue Arrangements 

UMer.Mmerlai Contract No. (B) bolow, conditionally titter atU) on Iha CouncO of The Stock Exchange granting a fisting 
for the Common Stares ol Atiantis, Issued and 10 be issued as mentioned herein other than lor Le vellonet. do Zoete a Bavan 
lure# agreed to use their reasonable endeavours to procure subscribers lor a total of 3.000300 Common Shares of Attantii at a 
pike ot 45g p«t share. Tire Agreement is expected to become unconditional and to be completed on 7th July, 1982. 

Under this Contract do Zoete a Bsvan wfll receive a lee of £75,000. Atiantis wU pay ail other expanses ef or InddeotsI to the 
appfic eti ow for a Itstin* for its Issued share capita end toe transactions associated therewith. The total expenses payable by 
Atiantis era estimated to amount to £290.000. 

Tha itrinlmum amount which, in the opinion of tho Directors, Is required to be retard hv tha nraoosed issue of 3300300 
Common Shares ol Atiantis for the natters a petrified in paragraph 4 of Pan I of the Fourth Schedule to ths Companies Act. 1 948 
la £1 350300 made up as follows : (1) purcheso price of property : £450.000 ; (8) piaOmlnaiv expenses and commission : C7SLC00 : 
(BQ repayment of moneys borrowed for the foregoing : nfl : and (lv> working capital : £825.000. 

Hie price of tho shares as shown to The Stock Exchange Daily Official List wJU be expressed In Starting. Dealings wfll be 
I for normal account settlement. A branch share register and irepsler office has been esubtished fa Joreoy end share uwtaara may 
ire effected on normal United Kingdom stock transfer forms. 

Because oi the establishment ot a branch register In Jersey the consent of the Finance and Economics Committee of toe 
States of Jersey under the Control ol Borrowing (Jenny) Order 1 958 has been obtained to the issue mentioned hereto, ft must 
be distinctly understood that In giving this consent tha Finance and Economics Committee does not taka any rarooJttlbUUy (or 
lha IlmiicM soundness oMtataue or fonbocorrecuuffis ol any of tha statements made or opinions expressed wlthiognf toB. 

4. D In rA wnr c of Interes ts 

(a) Imroedlorelr fotlowfng the transactions described In tills document (bat before tire sale described In pangisph 4(b) ) 
Usa hakflags at the Dtotcias and ofllcereol Atiantis end tbdi Immediate famines wH be 03 ioBows.sH boneflctal:— 

Common shares Percentage 

L.H. Payne 1Q343.7B8 6132 

R.Dyk — — 

D.C. Deacon 1.734390 838 

RiF.Sfffla 730323 33S 

J. F. Curran — — 

L. D. Howes 800,140 430 

R.V. MUDgan — — 

(b) Me. D. C. Deacon fatands to teti to two pwdttsen a total of 1.000,000 Cormnon Shares of Atiantis u ■ prica of not 
lass than SI per ahsre as soon es piactiGabla after completion olthe transactions described hereto. 

(c) Saw as aforesaid, the Directors are not aware of any other shsrehotdlngs which wIE rvpresaot 5 per cenL or more of 
the barred share capital of Atiantis fodawtog the transactions described to this document. 

(d) Neither Btihri Engineering nor SeatDfi -Jordan has any Interest In the share capital of Atiantis . 

(e) Following the transactions described In tide document. 6.000.000 Common Shares of Atlantis would remain 
unbared. E xcept In raration 10 too Stock Option Plan d ascribed to paragraph 7 of ihb Appendix and the proposed offer lor tho 
ootsandbiaBbareBof Le VeQoneL thoto farm present Intention 10 Issue any of tho iinhorised but unissued shore capital of Atiantis 
and without the prior approval of the shareholdais In General Mooting (a) no fame of Common Shares win be motfo which would 
offocdwriyefisr the control of Attends end (b) no (notorial Issue of Common Shares (other Dun to holders at Common Shares 
pro rate lb tltair extadng hokfinga) wM be made within dm year (root toe data ol this document 

(0 Seva for the towresis af Metsts. Payne. Deacon. Sefla end Howes in toe ocqutsUtats mentioned heroin and os 
dtsctoaod to paragraphs* (1) and Q), no Director or office rot Atiantis, nor Blaln Engineering, nor Seaton- Jordan has or has had 
aface 1st July, 1980 any direct or Indirect Interest In any aura acunlred, disposed of or leased to or by. or proposed to bo 
acquired, dtepoeod ol 01 loosed to or by any company to the Group. Save as disclosed hereto, no Director or officer of Atlantia 
bee been Interested In too promotion of any company In the Groupu 

(gt Sava for iha Interests of Messrs. Payne. Deacon, Satire and Howes In the acquisitions mentioned herein and as 
dbchsaed in paragraphs 4 (I) and 0). no Director or officer of Atlantis fa materially httaostad In any canton or arrangement 
subsisting « ttw date hereof which Is significant In relation 10 the business of the Group taken os a whole. 

(tv) The aggregate emoluments of the persons who era now Directors or officers of Attends tor the vssr ended 31st 
December. 1381 amounted to S189.000.lt fa estimated itat for the currant flnandel yea! ending on 31si December. 1982 such 
emohnnents would amount to S 26 Z 300 . 

CO Q) The loll owing Dhectoa and cmceaol Aflettfa are ben afidafly Interested In the share c«aab ot AatacdtWtad 
Cbrenwonti— 

ABintomt Ctarmnmt 

No. of Shane No. of V Sharer 

L.H. Payne . .510 (28 par cent) 1300 (10 per cant) 

D.C. Deacon 240 (13 MrcanL) 500 (S per cent) 

' E. F. Satire 04 (3 percent.) 100 (1 per cent) 

L. D. Howe* 54 (3 percent) ISO (1 per cent) . 

Save as aforesaid, no Qbgdor ot officer ol Atlantis Is a director or officer of « has any other interest In Ashftxnt 
or CJaremoum. 

(B) Dlractott end officers of Atlantis Irani the foflowtag participations In tha Joint ventures tetened n ndar 
"Joint Ventura Management” : — 

Joint Venture Amount of Pmtidpetiotr 

UH. Payne Joint Ventures *80300 (13 percent.) 

D.C. Deacon Joint Ventura 1 550,000 (23 percent) 

LD. Howes Joint Venture 2 *20,000 (0.4 per cent) 

00 Under the terms of -the tinritsd partnerships Agtocourt and Cbramouiit receive nuuragaaiUlt l*Bf and Ota 
entitled to a percentage of the net profits of tha partnerships. 

0) Mr. D. c. Deacon fa Interested beneficially In 20300 Ordinary Stares of Le VaHonet and as trustee ta a farther 
55300 Dnflnaty Shares 

5. Taxation 

Dividends paid by a company resfcfent In Canada to shareholders who are noi resident In Canada aresubfaettoa wfth- 
hotdtog tax at the rate of 25 per com. However, when a dhridapd is paid to e U.K. resident as registered sharehotoor. with- 
holding lax mav be deducted at a reduced rata, currently 15 per cenL. under the pravfalons of too Double Taxation Agreement 
between the U.K. end Canada. Tha samo reduced rate of withholding lax will apply to dividends paid 10 a UX nominee, pro- 
vided that ouch nominee is a U.K. collectfno agent or nominee (Inctudfag LUC marking names). A working arrangement has 
been formulated with the Inland Revenue whereby ft wfll undertake to collect and remit to Canada any additional non-resident 
Ux due from beneficial owners resident outside the UJC Residents of toe UJC who are unable on the remtaanee basis In respect 
of foreign source Income (Ira. UJC. resfdenu who are domicil nd outside tho U.K, end those who are BrliMi subjects or Republic 
of Intend citizens end are not ordinarily resident In tha U X) may claim a refund of withholding tax only In respect of such of 
toe dhridends as are remitted to the ILK. 

The nut amount of dividends received from Atiantis plus tire Canadian withholding tax thereon wQL hi general, be brought 
tow account for UJC. tax purposes as Income ot the U.K. resident entitled thereto. UJC. residents who are taxable OR the 
remitunce basis wfll be assessed on tha basis of such dividends as ere treated *s remitted to the U.K. 

DIRarem roles will apply to a UJC. reddent receiving dividends In respect of shares which are held fa connecttal with a 
buritiera canted an by that resident In Canada tiuough a permanarnasaMislinienr or fixed base. 

A bonus bsno of share capital paid to shamboUere who am not resideni In Canada Is subject to a twithhotdktg tax at tha 
rate el 25 par cent, unless it is made with stares of the same etess as those in respect of which ttracntldementaracotoa 
■wnon who, together with rotated pemits, does not own more than 10 percent, of the shares of too company on which tho 
dividend terra paid. However, whore a bonus Issue of shams fa subject to withholding tax and is made to a UJC. retidant es 
registered shareholder the reduced rata, currently 15 percent, under tire provisions of the Double Taxation Agreement should 
apply to the extent that ft 1* reasonable to regard the bonus u a dividend wiihln the terns of the Double Taxation Agreement. 

Under Canadian law any capita gain arising on a disposal ol pubficiy traded slock of a Canadian company by a non- 
resident of Canada will be raxable to Canada, II toe shame are taxable Canadian property. However, to most cases UJC. resktents 
cart data toe protection of too Double Taxation Agreement between tho U.K. and Canada, which provides that where shams 
In a Canadian company are quoted on a recognised mock exchange fa Canada or the UX any goto on disposal would be 
taxable only In the country to wMcfa the ssUn Is nsidem. There are certain restrictions where UX residents were previously 
resident fa Canada. 

UX resident or onfinaifly nshtaot sharehotdras wH bo Sabi* in tho usual way to liX tax on capital gab* arising on ■ 
di sposal of shares. 

*• Artiolra ot Aa ao Bl ation H raArtclracf A ranclstfan of Altetifalnctoda pr u vfatons to the following effeef}— 

Snare Capital 

(el The Boerd may eflot or aftanvba dispose of untesoed shams on such Terms and ctndftjons and to sadt poisons as 
It nay Iron lima 10 tbits determine. • 

VUfaa/OmlMtfas 

(b) Sobfact to any restrictions h opo tod on any particular clrac ol shares, al any Ganeal Meeting on a show of hands 
every sharnhoktsr who (being an IndMdirel) Is present In person or (being a corporation) la presort! by proxy or a duty appointed 
representative has one vara and In tha case of a po8 ovary eitareboldar present in potson or by proxy has one vote lor every 
stare of which he Is the registered holder. 

Bormwtmr Powara 

(c) The Board may borrow money for too purpose of Atiantis' business and secure tha wpoymant of tire same by 
mortgage or charge on too undertaking and the whole or any part of tho assets end property of Atiantis (present and future) 
Including its unissued capital, subject to a Group borrowing Omit of too greater of M0300300 or twice shareholder*" equity. 

Director 

(d) A Director b not mo to r e d to hoM any qualification (hams. 

(e) The remuneration of toe Directors fa to be determined by the Board. If any Director p er for ms my extra services or 
any special duties In going or residing abroad for tho puroosos of Atlantis" business, ha may be paid additional rem u neration, 
which may be by a fixed sum, a percentage of profits or otherwise es may be determined. 

(O No Dfmcror to dtequafifled by hta office from contracting with Atiantis. nor fa any contract ot anan gernent entered 
brio by or on behalf of Atlantis to which any Director is In any way taterosted liable to be avoided, nor fa any Director so con- 
tmofng ot baton Interested Babfe to account to Atiantis for any profit reafisad thereby, but tha nature of his Interest must be 
declared by the Director at a meeting ol the Board. 

(g) A Director may be appointed by the Board to ft* office of Managing Director and the Board may fix bis renrunerto* 
flop, which may bo by wey o! raarY.co rnTOfaal OQ ota right to parrtefaetota profit* or a co mbto att ort thereof. 

7. Stock Option Pfan 

CD On 20th April, 1982 ft* Boanf of Directors of Atiantis adopted a Stock Option Plan. Tho Pfan provides that toe 
Board may from time 10 time In In dberaftan grant to Directors, officers or am eto va es of Attends or any of its subsidiaries 
options to purchase Common Shares of Atientis. The Directors era to determine the option price, tho number of shores to bn 
a Dotted and ell otoar terms and conditions of the options. A total of 750300 Common Shams has been reserved ter the Pfan. 
Options wfll be exercisable for a period ol 5 years, subject as earlier termination to the event of toe cessation ol the option 
holder’s employment with tire Group. During each year of the option period options may be exercised in rented or 20 per cent, 
of the mimbet of tomes under option for ouch calendar year atoca tho granting ol the option less too number of shares In respect 
of which the option has pmvfousfy beau exercised. 

(B) On 11th June, 1982 options to subscribe a total of 450300 Common Shams were granted ta 7 employees 
tBrer cbab la at a price of *1 par atare. Of thraa 100300 are under option to Me E. F. Sofia and 70,000 to Mr. L. D. Howes. Save 
os aforesaid, no capita of Atiantis or any ot Its subskflerfas Is ureter option or fa agnad camfitioiudlv or uncondHlona9y to bo put 
under option. 

8. Samoa Aammutra 

- MaL H. fteyne bra a Services Agreement wfth Atiantis for a parted of 3 yeara from 20th Apifi, 1982 at an annual sultry 
ef <100300 (subject to Increase by mutual agreement). Sava as aforesaid, there are no Service Agreements to force for any 
DIrecior of Ariantbi with any company to ths Group. 

SL Material Contr acts 

The follow! no contracts (not being contracts entered Into to the ordinary muse of business) have been entered Into by 
Aflantis or Its subsidiaries since 1st Jtoy, 1980 and are or mav be materials — 

(1) Agreement dated 16 th ApriL 1981 between Air Tall (HeUtags) limited (I) and Atiantis Resomces OD. pursuant 
to which Atiantis Resources acquired 1350300 Drdfaerv Shams af 2Bp each of La VaBonet lor a cash coitaderadon cf 
£562300. Pursuant to the stone Agrewnent Mr. D. C. Deacon and Crain mount *»eb acquired 75300 Ordinary Shores of 25p 
each of Le Vaflortat or 45o per stare: 

(2) Otter deled 6th May. 1 981 made by de Zoete fa Sevan on behalf of Atlantis Resources, putsuanl to which Atlantis 
Resources acquired a farther 17313 Ordtoaty Shares of 25p each of La Wafionet fora total of £7.i&6 In cash which eharet were 
s ataae o uan tty sold at the raroo price to Mr. Deacon In trust and CraTpmouni for hs dtecretkmafv Investment diems: 

43) Ptasoecnw dead 11th June, 1882 pursuant to which Atientis aandred. conditionally as provided therein, fa) ail 
the tesued end outstanding Common end Preferred Stares of Attends Resources in consideration ol the Issue credited as Idly 
paid of 13386300 Common States of Atiantis to the shareholders of Atlantis Resources, of which 10364341 chan, wore 
issued » Directors and officers of Atlantis, and (b) all to* issued and omsandtog Common Shams of AQantis Exploration In 
consideration at the issue credited as fofiv raid » Mr. and Mrs. L H. Payne of 1,714300 Common Shares of Atiantis: 

(4) Agreement executed on 11* June. 1982 between Mr. L. H. Payne (D and Attends OD. whereby Atlantis acquired 
Wffl effect from 1st January, 1882. conditionally as provided therein, certain neural on properties from Mr. L H. Payne In 
cotahtatatom ol the issue endftad as fuQv paid to trim of 1390397 Ctuwion Surra of Atlantis; 

(5) Agreement executed an lift Jim*. 1982 between Mr. L H. Payne 0) and Attends OD. whereby Atlantis acoulred 
wfth effect from In January. 1982. condtoonativ as provided thereto, certain producing oU properties from Mr. L. H. Payne In 
cattaderailOR of the payment of *1300000 Jn cash to Mi. Pnm; and 

(6) Agreement dared 1st July. 1382 ■between Atlantis (0, certain of fte Dfcactos 00 and de Boats ft Baton (ML 
being toe cotaract mentioned in panoapb 3 of tills Appendix. 

10 . Mtaceltenema 

* (a) m No company In the Grams fa engaged t» any fitinatfon or arbitration ef material importance and no fitiga&on 
or claim of material Importance fa known to the dubooje ro be pending or threatened against any such company 

00 No claim to relation to exploration rights has been made or notified ehhei by or against any company In Qm 

Group. 

(b) Stacolst July. 1980. save as dfadosad to paragraphs 1,2,3 and 7 of this Appendix and In c onnect i on wfthttm 
proposed offer for Le Veflonet, no capita ot Attends or ot any ot Us sub&idteifra has been issued, or Is proposed 10 be Issued 
luBy or partly paid either tor cash or tor a cooskfoiatfon other than cash and no commissions, discounts, brokerages or other 
special terms have been granted in connection with the bsue or sale of any stare or loon capital of any such company. 

(c) Mr. J.F. Qroan. a Director of Aflantfa. Isa partner In the firm «l Bennett Jones. AtiantiT sotidtODL wttich wfl be 
recaftrtno normal pralasstonul lass In connection wi th ttatr a reactions described to this document. 

(a) A*certjnetttoo?i Bremption hutaon granted under section 418 of the Companies Act, 1948 by too CouncB of The * 
stock Exchange. . - ... 

11. . Consent* . . ... ■ 


i Act, 1948 by the CouncB of The ■ 


11. Consents 

‘ Blaln Bm lneering. Sa^ ^ tor^^trod^^to nt e 


liven and hava not wtihdrawn their respective written 
■ copy ol their Report at the ntaranoa* to them (as the 


case may be) in the form and context to which they ant respectively Included. 

12. Document* deRwaradtn the Raglatrir of Cufmraraiee 

The documents attached to the copy of this document delivered to theTtegfatrar of Companies for legtetratign wen copies 
of the letter br which the shove-mentioned 3300300 Common Shares are ta be placed, th* written eoneenu mentioned above, 
e statement of tho edjratnonta made by Thonrafllddefi to enKtoget the flgurcaaet out In toekr Report and giving theft reasons 
ihersfor and copies of the above-mentioned material commas. 

IX Documents for Inspection 

. Copies of ft* toflowJng documents wffl be svsBabfa tor inspection st the offices of Norton, Roee, Bettered Et Roche, 
Kempson House, Camomna Street, London J=C3A 7 AN, during normal business betas until 19ft July, 1982}— 

(«) the Memorandum and Articles of Association of Atiantis; 

(b) the audlied accounts ot Atiantis as at 31 st December, 1981 and the audited accounts of Atfamk Resources and af 
Atiantis Exploration for the financial periods ended 31 st December, 1880 and 31 st December. 1881 : 

(c) the Report of Blaln Engineering sat out In Appendix 1 and the Engineering and Economic Evaluations to relation to 
. tile ofl and gas properties of Atlantis Resources. Attends Exploration and the Payne As&ois prepared by Btein 

'Engineering: 

(d) the Report of Seaton-Jorrian sto out In AppcndtxZ end the evaluations of the non-reserve oB end gas properties of 
■ Attends Resources and of too mm-iaaene nil and gas properties Indudod In the Payne Assets prepared by Seaton* 

Jordan: 

(e) the Repo* of Theme Riddell uf out In Appendix 3 and tho statement of adjustments Ntottog thereto; 

U> the Stock Option Pta» referred to In paragraph 7 ol this Appeixfix; 

(g) »e Services Agreement ref etted to to paragraph 8 olthfa Appendix; 

(h) the material contracts rafaned to to paragraph 9 of this Append!*; 

(D the written consents refHtedtofn paragraph 11 of tote Appendix: 

d> the Joint Varrare Agreements rafamd to uader^ "Joint Vaotunr Management*: and 
gt) too Companies Act (Atoona).. , 

Dated 1st 1962. 


20 


BUILDING AND CIV IT m^lTVrFEB IlVtt 


Financial Times Monday July 5 1932 . t 

Engineering contractors to the 
oil gaa chemical process and 
power Qgnewiion indasB;e&' -r 


German outlook gloomy 


toe continuing recession in 
■ ® y 65 * German construction 
industry is forcing some funda- 
mental changes in the sector’s 
make-up and sending contrac- 
tors still further afield in search 
of work. Some of the larger 
construction groups like Eolz- 
mann. Hochtief, Bilfinger and 
Berger had encouraging starts 
to the year, hut often at the 
expense of the smaller and 
medium sized companies. The 
industry leaders are also 
pegging hopes of higher profits 
on extensive overseas contracts 
in the Middle East and North 
America. 

Philipp Holzmann, West 
Germany’s largest construction 
ETOup, which in February won 
a DM Zbn Saudi contract, 
recently forecast “ satisfactory ” 
profits for this year primarily 
aa a result of buoyant overseas 
order books. 


sample, enjoyed on average 
a 5 per cent drop on the 
previous year. 

The West German Building 
industry Federation is pessi- 
m£tic about the future. It sees 
ff 83 as the earliest date for the 
start of a recovery. Last year, 
it claims, the industry lost 10 
per cent of Its labour farce and 
from past experience it knows 
they will not return. In the 
1873/75 industry shakeout, some 
400,000 workers left the con- 
struction sector never to return. 

Confronted with the prospect 
of reduced capacity, the 
Federation believes higher out- 
put and unproved profit will in 
future only occur with the 
advent of increased mechanisa- 
tion. Despite the Federation's 
conviction, however, the in- 
dustry itself has ohoseu to 
ignore this advice, protesting 
that it cannot afford new plant 


WEST GERMAN BUILDING INDUSTRY PROFILE— 1981 
Net profit Turnover New orders 

Company (DMm) (DMbn) (DMm) % change 

Philipp Hohmam 43 7.7 * — • — 

Hochtief 124 5J 476 -12 

Bilfinger and Berger •— 3.7 43 —26 

Strabag 11 U, 3.1 +27 

* Not available. 


But while large groups like 
Holzmann attempt to insulate 
their balance sheets with over- 
seas expansion, their efforts are 
having a profound effect on the 
medium-sized building com- 
panies in Germany. With build- 
ing costs now effectively at 1976 
levels, many groups are being 
squeezed into “ dangerously 
competitive ” bidding. The 
number pinned against the wall 
by bankruptcy has consequently 
soared. 

In 1981, over 1,500 German 
building companies declared 
themselves bankrupt, while in 
the first five months of the 
current year almost 800 have 
failed, compared with only 456 
in the corresponding period of 
198L In the last seven years 
7,741 construction companies 
have failed and the remaining 
59,000 have slimmed down. 
Last year, Holzmann, for 


and equipment. New orders 
placed for building industry 
machinery slumped by 34 per 
cent during January-April com- 
pared with the first four mouths 
of 1981. 

The Building Industry 
Federation has pleaded with the 
Bonn government to restore 
some of the funds cut from 

public works progr amm es, but 
to no avail. Overall industry 
output is expected to decrease 
this year by 6-7 per cent, a 
potentially dangerous decline in 
what amounts to Germany’s 
largest industrial employer. 

Sensing the danger signals, it 
has been the larger groups 
which have reacted to the de- 
teriorating conditions. Last 
November, Hochtief, the second 
largest building group in Ger- 
many. covered its options by 
purchasing a 20 per cent stake . 
in the industry leader. 


Hol&nann. A month later 
Hochtief expanded its interests 
in the Netherlands with the 
acquisition Of the Broekhoven 
dredging subsidiary of 
Internal! o-Mueller. 

Hochtief s foreign markets 
now represent 54 per cent of 
group turnover. Its domestic 
German orders dropped by 25 
per cent last year to DM 2.1bn 
(largely due to the Bonn- 
inspired cutbacks) whereas 
overseas contracts improved by 
7 per cent to DM 2.6b n. The 
group's building volume for 
1981 however dipped to 
DM 5.5b dl 

A more dramatic shift to- 
wards foreign markets was 
undertaken by Bilfinger and 
Berger, the third largest West 
German construction group. 
Last year, B and B increased 
its foreign building work by 93 
per cent to DM 2.5bn whereas 
domestic construction amounted 
to DM Uhn. ' 

According to the Building In- 
dustry Federation. 55 German 
construction groups secured 
foreign orders last year valued 
at DM 12.1bn and over 93 per 
cent of this work is based in 
Opec countries. 

But in the first three months 
of this year, the picture began 
to lose some of its gloss. A total 
of 27 companies secured 73 
orders worth DM 2.9bn — a 
startling drop from the 
DM 5.1bn recorded in the 'first 
quarter 0 f 1980. 

The future -is no more 
encouraging. The Industry 
realises that it must wait until 
domestic order books are 
pumped up by government con- 
tracts— ^an event which will 
take, at least another 18 months 
to come to pass. Similarly it 
must not over-extend itself 
abroad. Productivity will have 
to increase through heavy in- 
vestment In mechanisation at 
prices not many can afford. 

Inevitably, more companies 
are expected to collapse. As one 
Frankfurt - based builder 
summed it up: “We built the 
walls and now our backs are up 
against them.” 

PAUL HANNON 


V\fe are pleased to announce that the 
following individuals have joined our firm. 


Art Smith 

as Vice President; ... 
Director of Energy Futures 

and 

Rodney W. Dow 

as Vice President; 

Manager of Energy Futures 


REffCD 


Refco International Futures, Inc. 

Four Wbrid Trade Center Suite 6228 
New York, New York 10048 (212) 432-3300 
TRT 177336 REFCO UT 
Greenwich, London, Sao Paulo 



W TO CUT 


THE COST 


OF PHYSICAL 



Ifours fr ee. 
Proven techniques 
for raising efficiency 

and saving money. 


Please send me your free book on cost-cutting ways 
to deliver the goods. 

My name is 

My position is 

My company is 

My address is 

Stewart Tfaddefi SPD Distribution Limited, 

Exchange House. 60 Exchange Road. Watford. Herts. WD1 7BW Tet Ward (0923) 28591 



Small builder with 
an important voice 


MALCOLM Fordy is a “grass 
Foots” contractor, ru nning a 
.■email family building business 
out of Stockton of Tees and 
refusing to subscribe to the 
growing view that the construc- 
tion industry is at last gaining 
ground after three years of de- 
clining workloads and rising 
despair. 

George Fordy, the company 
started by his grandfather and 
of which he is now chairman, 
could happily contemplate tak- 
ing on more work. Contracts 
remain hard to come by and the 
profit margins available to the 
winning contractor are invari- 
ably pitiful The company is 
going back into public sector 
housebuilding in search of work 
and has put on one side an 
unders tanding with another local 
contractor not to compete in 
each other’s traditional territory. 

“Whatever some people are 
saying about the end of the 
recession, some companies are 
still being crucified, especially 
in the provinces. Margins are 
being cut to the bone and I 
believe the inevitable conclusion 
is going to be a big increase 
in the number of contractors 
shutting up shop. It is time for 
the industry as a whole to say 
enough is enough-” 

Mr Fordy is fortunate in one 
sense, however. He also happens 
to be the 1982 President of the 
National Federation of Building 
Trades Employers and, as such, 
his views on the industry might 
tend to carry a little more Clout 
than if his domain stretched no 
further than Teesside. 

Thirty years a builder, 
Malcolm Fordy has had a 
longer apprenticeship than 
most in preparation for the top 
job, serving the Federation in 
a variety of regional and 
national posts for over 15 years 
and joining its national council 
in 1967. 

He is proud of the industxy 
and of its performance, though 
he is the first to acknowledge 
its weaknesses and believes it 
labours under -a poor image 
because of the activities of an 
unprofessional minority. 

The poor image of construc- 
tion is, he hastens to add, a 
worldwide phenomenon, as his 
recent travels have confirmed, 
and the NFBTE’s current pro- 
posals to introduce a members' 
guarantee scheme — Office of 


Fair Trading permitting— 
would provide automatic 
indemnity for unsatisfied 
customers paying a premium in 
advance. 



Malcolm Fordy. president of the 
. National Federation of Building 
Trades Employers. 

As for the industry’s ability 
to present a united front in 
putting its case to government 
—the single most important 
client which also sets the busi- 
ness climate for all the others 
— he is optimistic but realistic. 
“ Complete federation is a very 
long way off but we are all ha 
the same business and depend 
oh each other. Closer and con- 
tinuing co-operation within the 
construction industries is a 
must but, at the same time, we 
need to preserve some of our 
independence.” 

Mr Fordy remains uncon- 
vinced, however, of the benefits 
of bodies like the so-called 
Group of Eight, designed to 
present a united view to Minis- 
ters of the day. “You cannot 
get everyone to agree on any 
single subject, apart from the 
need for more work. The 
group is better than nothing 
but its impact on the govern- 
ment has been limited.” 

Mr Fordy*s bluntness and 
realism may itself help provide 
some of the impact which has, 
like the work, been missing. 

MICHAEL CASSELL 


UK CONTRACTS OVERSEAS 

HENRY BOOT'S latest contracts m the Kowicxm to C«non ran- j 
in Hong Koag amount to way line in Hong Kong, ana 
£14.Bm, bringing the total of another £850,000 worth from 
work obtained in that area by china Light and Power Com* 
the company to about £40m. 6inv has gone to Henry Boot 
Following the supply and Qaphara, landscapers in Hong 
installation of the main line and Rang, tor works to areas out- 
sidings for the first two phases side Castle Peak Power Station 
of the Hong Kong mass transit boundary, 
railway, Henry Boot/Gammon . 

Joint Venture now has the . _ „„„ 

£13m Island Line contract AT ALCALA de Benares. near 
This also calls for the supply Madrid, LAING SA has a w- 
and installation of track and month contract wortn 



William PrcKsGrcasiTciPl S53€ai 


trade bed extending for a dis- 
tance of 12.5 km from Sfaeung 
Wan to Chai Wan plus 8.5 km 
of depot sidings and two km of 
workshop track. 

Henry Boot Far East will 
undertake a £lm renovation job 
on the old Beacon Hill Tunnel 


. about 

£5 ,2m from the Spanish Minis- 
try of Justice to construct a 
prison for 456 juveniles. 

Other work in Spain includes 
a hotel training centre at 
Marbella under a £l.6m award 
from the Ministry of Employ- 
ment, Welfare ’and Social 


Security: a £0.2m sward from 
the Port of Almcria Board for 
a drinking water reservoir and 
pipework at Almcna; and a 
SlQ&m reconstruction pro- 
gramme for improvement* at 
the crossing of the CN-150 
National Board and Hu* Terras 
rallwa> line at Ter rasa. Bar- 
celona. 


UK CONTRACTS 

MORE THAN n4m worth of Blackwell Tunnel Southern by fal^the 

work in the UK for companies Approach at Shooters Hill Road. XnduMn&l _PropLrtK*. for the 
in the JOHN LAING group A sum of £46m has been car- company to construct >™^nal 

marked for spending on this 
road, says the GLC. 

★ 

SOUTH GLAMORGAN County 
Council's £B.7m contract for the 
East Moors Link viaduct has 


includes two major schemes 
each worth more than £2m. A 
hospital laundry building in 
Swindon for the Wessex 
Regional Health Authority is 
worth £2.1m, and Leicester 

Housing Association has 
awarded £2.4m for the construc- 
tion of 135 fiats In five blocks 
at Dover Street, Leicester. 

A £1.2m houses, fiats and 

maisonettes scheme at St 
George, Bristol is for the 
Bristol Churches Housing 

Association. Three contracts 

from the London Borough of 
Southwark are worth more than 
£1.3m for refurbishment of 


gone to SHEPHARD HELL. The contract l 
accepted tender is based on an 17 units 


units with ancillary offices on 
sites in Amersham. Burks: 
Emmerson Park, Essex: and 
Letchworth. Herts. 

At White Lion Road. 
Amersham— the company's first 
In Buetanghamsfoire — 
accepted tender is based on an 17 units are being bwlt in 
alternative design using glued four blocks for Industrial and 
segmental concrete construction warehousing use. Traditional 
in place of the official con- steel frame and cladding tech- 
tinuous steel plate girder mques arc being adopted, with 
design. office accommodation contained 

Shephard savs this is pro- in one or two storey*. Phoenix 
bably the first time in the UK placed ihe contract on behalf 
that a contractor-consultant of Barclay Trust, 
team has been awarded a major Acting on behalf of Morrison 


bridge job using a pres tressed Development--. Phoenix has 
reSta TtiS ^n*hSf concrete alternative to replace contracted for 12 units In four 

ati nfficial Steel bridno dcsicn. blocks at Ammcnm Park with 


British Shipbuilders Engineer- 
mg Technical Services have 
placed nearly £L8m for a new 
heavy workshop and refurbish- 
ment of an existing one at its 
Fallion Works at Sunderland. 

Work far subsidiary company 
O. C. Summers Includes a £1.5m 
mai claying and service laying 
contract for. Thames Water, and 
two further contracts, each 
worth £0-25m, are for sewer and 
drainage works for Westminster 
City Council and for duct laying 
for British Telecom in Wales. 

★ 

THE FIRST major contract for 
work on Rochester Way Relief 
Road has been let to COSTAIN 
whose GLG« warded £6m deal 
covers the construction of 
Eltham Well Hall underpass, a 
key section of the new road 
which will incorporate a major 
bus and rail link for travellers. 

The relief road will be a 3.5 
mile long four-lane dual 
carriageway naming alongside 
the railway line from Falcon- 
wood to Kidbrooke where it 
swings north to join the 


Local authorities’ planning speed-up 

LOCAL authorities are taking planning applications were made also published a league table of 

during the. fourth quarter of the best performers during the 
1981, the first-time that applies- quarter. ' 


less time to process fewer 
pl anning applications. That ‘ is 
one unkin d interpretation that 
can be drawn from the latest 
Government statistics measuring 
how long it takes councils to 
make planning decisions. 

The good news is that 70 per 
cent of applications received by 
English local authorities during 
the last quarter of 1981 were 
dealt with within the statutory 
eight-week period. Ninety per 
emit of applications were 
derided within 13 weeks. 

Mr Giles Shaw, Environment 
Under Secretary, said that It 
was the best performance hy 
councils since quarterly 
statistics were first published 
in 1979. 

More disturbing for the hard- 
pressed construction industry 
will be the news that only 89,000 


turns have dipped below the 

100.000 mark. 

Ihe Environment Department 
says that “ the unusual circum- 
stances of the past few quarters 
make it difficult to evaluate 
fully the implications of the 
reduction.” a One explanation, 
according to the Department, is 
that an unusually large number 
of applications were brought 
forward last year, ahead of the 
introduction of fees for planning 
application on April, 198L 

Of the 89,000 applications pro- 
cessed during the fourth quarter, 

77.000 (87 per cent) were 
approved, according to the 
Department whose figures are 
based on returns from 345 


The table showed that 
Berwick-upon-Tweed had pro- 
cessed all 63 applications 
received during the quarter 
within the statutory eight weeks. 
Vale Royal in Cheshire pro- 
cessed 99.5 per cent of its 202 
applications and Wansbeck. 
Northumberland, 97.6 per cent 
of its 123 applications within 
eight weeks. 

Among the slowest planning 
authorities were Woking which 
processed only 11.6 per cent of 
its 258 applications within the 
statutory eight weeks. Hackney 
only processed 13.6 per cent of 
its 154 applications while only 
21.4 per cent of Bromley’s 744 
application® were determined 


(94 per cent) of English local within eight weeks, 
authorities. The Department ANDREW TAYLOR 


Olympic Advening 


For New Business 
Rendez-vous 
in Thessaloniki 

at the 47th IntenxitiofKil Trade Fair, Thessaloniki-Greece 
* 12-26 September 1982 


We Invite you to ttie annual rendez-vous 
of businessmen from all over the world 
interested in expanding their business 
activities. We invite you lo the 
International Trade Fair of Thessaloniki, 
at the crossroads of Europe, the Middle 
East and Africa. 

Ar the Thessaloniki international Fair you 
will be able to team about the most 


recent developments in world trade, 
come m close contact with international 
advanced technology and seize the 
numerous opportunities which Greece's 
expanding economy is oftenng you. 
Rendez-vous in beautiful and sunny 
Thessaloniki... new business and 
traditional Greek hospitality are waiting 
for you. 




ORGANISING - M FORMATION* 

"TTnasalonM International Fair - HELLEXPO - ORHEGE’ 

EonaHa 15 *. TO- 03 FS 2 Z 377 . 031 - 239221 . Taler 412231 
cables. FOiRINT. Athens: FXtffinon - Mirapofeoa t 
TO: 0*323*091, Tokvc 031560* 



_ Carrier 


an official steel bridge design, 
and continues the recent trend 
of competitive alternative bids 
for bridge contracts in this 
country. 

Tender price includes the cost 
of the design of the permanent 
work being carried out for 
Shephard by Robert Bcnaim 
consulting civil engineers and 
the design check which will be 
made by G. Maunsell and 
Partners. 

* 

THREE NEW schemes, together 
valued at £3m. have been 
awarded to WHXTXlNGHAffl 


completion programmed for 
this October. 

For Protea Industrial Estates 
will be six units in three Mocks 
in Pixtnore Avenue. Letch- 
worth, in sizes ranging from 
between 4.000 and 25.000 ft. 
■k 

TARMAC says it has several 
million pounds m new awards 
including a • flm pipeline 
renewal scheme for the CEtiB 
at Egpborougb. Hum'nerside. 
and £730,000 for road improve- 
ments and associated works at 
Lydiard Trrgoze, Swindon. 


WHAT’S NEW IN BUILDING 

industry, particularly where 
there b limited access. 

The ladder is made In 
modules and therefore does 
not have to be custom-built, 
sating time and money. 

It is estimated that in a 
large elty there may well bo 
in excess of half a million 
manholes for either water, 
gas, elertrlcity. sewage and 
other utilities, and in a great 
many cases the fixed access 
system was put in 25 or mora 
years age. 

To replace it with a custom- 
built ladder may be Impos- 
sible. since other building 
works have been built around 
U, whereas the modular 
ladder simplifies the problem. 

This ladder access system 
can be made In either mild 
steel, aluminium or stainless 
steeL 



WELCOUNE has introduced 
a multi-purpose ladder access 
system which has applications 
In the oil and shipbuilding 


SHIPPING 



• MATINA LINE/JOKI NIGERIA 

have vessels specially designed for Nigerian ports 
that can pick up your car consignment from European 
pom and deliver it to any port h Nigeria 
without tears 

Our expertise In carrying cars and moveable machinery 
has no equal throughout the world. We are now in a 
position to cany your cars, trucks and moveable 
machinery and deliver them within a reasonable period. 


W£A 2 EY 00 NE££> A£T££MLI£ 8 > OOUfO AARRiEfc, 
TT-EASE CONTACT 


MATINA LINES B.V. 
COMETON GEBOUW 
WESTBLAAK 108 
3012 KM ROTTERDAM 
TEl- (010) 1114 20 
TELEX 28 668 LABIA (NL) 





JOK1 (NIGERIA) LIMITED 
(ARIFREIGHT. CLEARING, FORWARDING 
AND SHIPPING AGENT) 

1 & 3 OLOFJN ROAD, APAPA 
NIGERIA 

PHONE: 873499, 873509 & 877932 
TELEX -22488 
CABLE: NIGCOUOK1, LAGOS. 



_I 


BRANCHES IN ALLNIGERfAN PORTS 


In war, in peace i you need his help 



W hen help is needed, please 
help him ;ind his dependants 


Adonatm,a(OTenaxitatea£ytD 

BENEVOLENT fund 

will help sddiers. ex-sol^eis and their femilies indisfcttss 


V 


s 



Financial Times Monday July 5 1982 • 


21 



WORLD STOCK MARKETS 


NEW YORK 


1968 ' 

High j Low' 


407* 
27 Xg 
27®* 


»\ 


BO 

31% 

24k 

31 

20 Tb 

47k 

1 « 1 | 

37k 

1 MB 

27 
IS 
33k 
23 k 

28 
50k 
33k 
46k 

sik: 

Utti 

X2St 


801* 

iK 

26V 

Ilk 

28k 

17 

10 

13k 

33%: 

8 % 

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84% 
16 . 
17k 
239. 
83% 
30k 

34% 

l«l» 


AGF Industrie*™ 
asa_. 


e&fEfcr 


stock 


Acme Wsve.™._ 
Atfoba Oilman 
*dvanoed Micro. 
ktmUfiftCiu 
kunutran (HJ\) 
Air Prod A. Cham 

*kzona— ™ 

Albany 

^berto-Cuhr™— J 
Albertson** ™__, 
AteaaAbuoInluni, 
Aloo standard.: 
Alexander *AJ_ 
Alaohaoy Iot__ 

Allied Owp_ 

Allied Stares _ 
AUteCfaattmen,.. 
Alpha Portd 


* July 
ft 


30% 

16k 

27% 

27 

17 


17k 

16k 

23k 

V 

ss 

3S 

12 k 

32k 

17% 

80k 

*4k 

83% 

30k 

88 k 

12 % 

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L„ ; • 


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51k. 
48k 
28k 
84% 
18% 
44 
38k 
5 set 
29k 
18k 
60 
43k 
16k 
38k 
4®k 
8B4 
4 
37. 
63k 
13k 


2 ft 

39% 

18% 

17% 

16% 

’ 9% 
36% 
18% 
29% 
24% 
11 % 
38% 
37 . 
10 % 
85% 
37% 
18% 
2 % 
29k- 
43% 
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{Alcoa. 


Amai Sagaa*— 

{Amdahl Corp...~. 
|AmendaNenI_ 
ftm-Ahfitm 

t Sm: fcandi. 

Am. Broad ontTa 

jAm -Cam 


Am.Xkanamid._ 
Are. Elect Piowr. 

Am. Express 

An. Can. tnsnoej 

Am. HoI«t * Ofc. 

Am. Home Plod. 

Am. Hasp. Suppy, 

Am. Mad leal Inti 
Am. Motors™™., 
Am. Mat Bucas. 
Am. Petf&Mu. | 

iAan. Qqaaar f*etJ 


88 k 

461* 

20 

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17% 

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37% 

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30 k 
45 
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34Ta 
Uda 
68 k 
1 B 1 | 
27% 


28 

26% 

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IB 

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16% 


Unt. Sta ndard, . 1 
]Am.' 8 toraa_ 
(Am.Tal. 8 i Tel, 

jAmdeklne„ 
lAmtac 


Ametaad lnd*™J 
Anchor HooXeU-l 
AnheaearNta—™. 
Archer DanMs- 
Arm 


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[Armstrong OC. J 


33k 

23k 

14k 

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AalUanrfOB^ 

Acad. D. Goods™.! 
AtJantic JUdt_J 
Auto- Data Fre— 
Woo, 


Avert nytl J 


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21 

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HKG 


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88 % 

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40% 

22 

22 % 

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17 
6 

18 
13% 
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Avnet —...] 

Avon Prod 

Baker Inti 

BaftOeaft Et_ 

sen Cal 

Ban nor Punta „ | 
Bank America 

Bank of N.Y. 

Sankara Tat N.Yj 

Barry Wright 

Bausoh ft Lomb. 
BaxtTrav Lab™J 
Beatrice Fooda..; 

Baker Inds ! 

Bell ft Howell . J 
Bell Industries!!] 

Bendtx 

Bonefloiai _ 


41% 

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13k 

17% 

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14 
41% 
34% 
19%. 

6 % 

lBTs 

15 
48% 

16 


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16% 

16k 

12 % 

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15% 

SP 

22 k 

22 % 

81% 

18% 

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12 

96% 

T 6 


iBettt SteeL— 
Big Thee Inda.. 

Black ft Decker J 

Block HR 
Sue 

Boeing— 
Bolse-Geacade™ 


Borden 

Borg Mtemar— i 
Brigga Strain — 1 
BrlstoHMyere™ 
IBP J 

Brockway OlassJ 

Brown Forman 8 | 

Brown Grp 

Brown A Sharp.. 
Brawng Ferris— j 
Brunswick™ _ 


16% 

16% 

13k 

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16% 

aik 

115 

a- 
18% 
14 
32k 
35% 
12k 
26% 
20 Jr 


: * r 
-ichr 


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' mii 


21 

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63k 

20 

37k 

42* 

47% 

88 k 

59% 

16% 

38 

27 

36 

35 

29% 

35 


11 % 

18% 

40% 

16k 

30k 

& 
33% 
35% 
7% . 
28% 
19% 
»4k 
19% 
187* 
26k 
30% 


IBucynia^rie 

Burlington fnd 

Buffington MriHm 

Burndy— ™ 
Bummgh*— — 
teBI laps. .„i— ;i| 


CPCmtl— 

CSX. 


Campbell Red LJ 
Campbell Soup. I 
Campbell Tagg-l 

CanaT Rando lph.] 
Can. Pacific 

Carlisle Carp 
Carnation H 
Carp Tech 


IHi 

19% 

41k 

17 

30k 

.36k 

a«k 

36% 

88 % 

9% 

36% 

*5% 

36% 

19% 

20 % 

* 1 % 

32 



16% 

84k 

69% 

.33 

36% 

16k 

13% 

12 % 

21 % 

a 

is 

9% 

60 

38% 

37 

19% 

7% 

47% 


Carter Hawley — j 
Catcrpllhir— — 

Ceianeae Corp— 

Cental 

Centex...:.. 
Central ft Sw— 
Central Soya., 

0artab>7»«d . 

Cessna Aircraft-] 

Champ HomaJMdf 

Champ Int 

Champ 8 p Plug J 

Charter Oo 

Chess Menhstl'n 

Chemical NY--) 
Cheiefa Pond 

Chicago PneumJ 

Chrystsr 


Chubb ™ 


13k 

37% 

43 

30 

21 % 

16% 

10 % 

Ilk 

16 

27. 

12 % 

8 % 

8 k 

40% 

30 

31k 

12 % 

7 

36k 


> / An Ci5l% 


64% 
. 267| 
\ 29k 
: 56% 
. 26k 
87% 
32 
14k 
17% 
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19 

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38 

19% 

28% 

647« 

16% 

20k 

18% 

133* 

167a 

33% 

17% 

13% 

24k 


3982 

High - 1 Low 


- 33% 
23% 
56 k 
22 % 
67% 


28% 

17% 

23% 

19% 

49% 


Steel? 


{OeiumWa Oat — 
Combined Jnf J 
Combustn. EngJ 
pnwfth. Ediaoni 
toomm.««toi7toJ 


July 

2 


30% 

19% 

23% 

21 % 

62% 


15 

32% 

27% 

S- 

40% 
25% 
18% 
•« *' 


33%' 

38% 

Si 1 

36% 


28 

21 % 

17% 

29% 

38% 

20 % 

i- 

23 

26% 

22 . 

16.- 

83 


Comp. 8 denoe_ I 
Cone Mill*— . 
Comae 


Cera Edison 

Com. Foods. 

Dera^rright— . J 
Coo. NaLOas.^ 
Cenmuar Power! 
Coot. AIrUnca-4 

‘ Conti. Corp 

• Conti. Croup__J 
Conti. mbwIa—Zf 
Conti.Teleptr>., 
Control Data-, 


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as 

23%. 

17% 

54k 

36% 

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17 

r 4« 
JU% 
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22 
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23k 


68 % 
13 
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66 % 
22 
32k 
36% 
36 
30% 
22 k 
39k 
1 45%- 
85* 
50% 

63 T# 

64k 

37% 

36 

36% 

34% 


26 

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13% 

39% 

19k 

24 

28% 

26% 

82% 

17% 

86 % 

66 % 

6 % 

26% 

48% 

13% 

26% 

84% 

82% 

82% 


Cooper Inds, „ 
Coon Adolph—. 

Copperweld, 

Coming Glass . J 
QofToion BtackZJ 
Cox Broa»oKst*g 

Crane 

Cracker 

Crown Cork—, 
Crown Zen 

Cummins Eng „ 
Curdse-Wltflht 
Damon ] 

Dana™— J 

Dart ft Kraft I 

Data Gen 
Dayton -Hudson 4 

Daare 


Delta Air. 
Danny's™ 


12 % 

40k 

26k 

10 % 

88 % 

13% 

24% 

58% 

16% 

45% 

32% 

26%. 

48% 

33% 

'13% 

23% 

5 s * 

38 

10 % 


14 
ilk 
36k 
17% 

8 

66 

10 

10 % 

47% 

6 % 

38 

20 k 

US 

if* 

20 % 

68 % 

31V 

15 


Dentsptylntl 

Detroit Edison. 4 
Diamond itrtl„_4 

Diamond 8 hanX_) 

DiOlorglo 

Dfgrtal Equip-. 

Dllion 

Dtsnoy <Wali} 

Dome Mines— 

Domralty (RHJ j 

Dover Corp— 
Dovr Chemloal ™j 

Dow Jones— { 

Dresser — ... 

Dr. Pepper 

Duke Power— 
Dun 

Du Pont 
Eh 


23k 
11 % 
38 
20 
W * 
66 . 
18k 
M% 
67% 
6 % 
40 \ 
80k 
20 % 
48% 
16% 

ifS 

S* 

16% 


22 . 

6 % 

24 

75k 

32% 

14k 

24% 

29 

4% 

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48% 

12 % 

36 

26% 


16% 

.5 . 

if* 

26% 

10 % 

17% 

18%. 

2 % 

17% 

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7%- 

29% 

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{Eastern AlrltnsB 

[Eastern Gas ft FI 

E ast man Kodak-1 
MstonB 


EchUn Mfg^H 
Eokhard Jack I 

Klectronic DataJ 

■Elect. Memorial 

Npaso^H 


Emerson. Elect Jt 

Emery Air Pgt— 
Em hart 1 


lEogelherdCorpJ 


U 
Ms 
18% 
72k 
28% 
12% 
187, 
26% 
4% 
18 
43% 
_7% 
29% 
19 ' 


*47, 
50% 
24 
17% 
24% 
30% 
27k 
21k 
: 4% 
23k 
22k 
11% 
28k 
1% 


»„ 

34% 

11% 


17% 

43% 



18% 


71* 


S ’ 4 

ex. con o 


3 S 



3% 

10% 

18% 

7% 

19 

% 

33% 

20% 

|9T| 

2B% 

7 

Faddara 

Federal Oo^ 

Fodcrai-MoouL- 
Fed. NaLMort™. 
Fed. Paper Brd.. 
Fed. Resources.. 
WDtp. Stores 
FleldorastMl™- 

Firestone™. 

1st Bunk System 
1st Charter Flu. 


17% 

44% 

20% 

7% 

24% 

27% 

94% 

14k 

3k 

23% 

28% 

10 

»% 

07s 

42 

21 

11% 

29% 

10% 


19% 

33k 

3&k 

16% 

-30% 

3% 

: . 6% 
16k 
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33% 

55* 

37% 

16% 

23% 

-S’* 

52% 


14% 

31% 

93 

7% 

21k 

9% 

.8% 

10% 

13k 

28% 

17% 

29% 

10% 

UK 

16% 

8% 

22k 


1st Chicago- 

1st City Bank Tsk 

1st Intststata. 

■1 -a. ajl-, ■ f nnl 

UtPnltWippis-. 

IstHafc Boirtoa-] 

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(AbitlW. 17% 

;n!oo Eagle ! 5.62 

lAIumln. i 217* 

Jgonm Steel. 


Ik Montreal ! 

{Bk Nova Scotia... 

: Resourcas.1 


23% 

10% 

17% 

20% 

2.48 


20% 

19% 

33% 

24 

6 

12% 

34 

13%' 

11% 

54k 


17% {Ben Canada. ! 

10% Bow Valley 

21 BP Canada □ 

13% BrascanA. 

2.80 Brines 


5% . B. a Forest. 


18% MIL Inc , 

6% ICadlllacFaJnrlewj 

8% |Can Cement™ 

18% (can NW Energy, 


17% 

14% 

21 

13% 

3.30 

7% 

18% 

2 s8 

22% 


33% I 28%. 
29 ] 20 


ICan Packers ! 29% 


253, 
40% 
18% 
36% [ 


17% 

25 

13 

31% 


Can Trusco — 
Can Imp Bank™.; 
Cdn Pacific > 

Can P. Ent.— . 


toon lira. 


21 

18 

k5 

13 

33% 


22% 

54% 

18% 

8% 

8% 

9% 

5.12 

33 

177, 

14% 


15% 

341* 

13% 

6% 

3,50 

6% 

SL3 

15% 

f 


[Chi 


In CO. 


toons Bathst A. _ 

Icont. 8k.Canadi 

jCosska Res 

Certain. 


Daon Devel 1 

Denison Minas., 

Dome Mines 

Dome Petreluem, 


21%. 

341* 

14% 

6% 

3.50 

5% 

2.60 

15% 

8% 

5.87 


40% 

16% 

21% 

72 

23% 

2.43 

17% 

0.87 

12% 

303* 


27 [Dom Foundries-] 
13% Dom Stores™. 

15% Domtar™ 

33% ,FalOOn NJoksI — 
IT, 


1.30 ot. West Ufa-, 
IOTb Gulf Canada.™ 
1.85 Gulf Stream RssJ 
7% Hawk Sid. Can 
Holimger Argua-j 


25 


27 

13% 

11 

2.05 

13% 

1-85 

7% 

26% 


24% 

23 

10% 


85% 

IP* 

17% 


13% 

15 

5% 

36 

20 

107* 

9% 

13% 


Hudson Bay Mngl 
Hudson's Bay- "4 
[Husky OU 
lmasco 


Imp Oil A 

inco 

Indal. 


Inter. Pipe- 


14% 

IS 

5% 

38% 

227a 

10k 

9% 

15% 


25% ] 16% 


11% 

3.35 

40 

28% 

39% 

8% 

22% 


7 

2J30 

23 

IS 

33 . 

5% 

11% 


Mao Bleed el. ] 

Marin ft Spenoerj 

[Massey Ferg™.™| 

Mo Intyre Mines- 

Mitel Corp 

Moore Corp 

Nat. Sea Prods A| 
[Normnda Mines— 


16% 

7% 

23S 

23 

21% 

35 

5% 

11% 


60% 

17% 

2.06 

68% 

23 

15% 

15 

3.35 


45% 

7 

1.15 

52 

14% 

11 

8% 

1.75 


Nthn- Telecom— 
Oakwood Pet. • 

Pacific Copper—! 

Pan oan Petrol— 

Patino™ 

Placer Dev- 

Power Corp™ 

Quebec Strgn— [ 


46 

9% 

1^0 

65 

16 

•J" 

UO 


9% 

IS 

40% 

26% 

143, 

12% 

68 

19 

30% 


81* (Ranger Oil-, 

9% [ReadStenhaA.™ 
27% ; Rio Algo m— 


19 

11% 

4.75 

57% 

157* 

167* 


Royal Bank - 

Royal TYuaoo A— 

Sceptre Ras™™^ 
Seagram™—™— 

Shall Can Oil 

Steal of Can. A™. 


S% 

11% 

27% 

19 

11% 

5.50 

59% 

16% 

16% 


10% 

34% 

24% 

30T, 

25 

10% 

227a 

14% 

37% 


5 

217 b 

18% 

22% 

16% 

6% 

14% 

11% 

27 


Tack 8 ■ 

Texaco Canada..! 

■ homson News A 

Toronto Doth Bk. 

Trans Can Pipe. 

1ran*Mntn.0llAJ 

WnlkerfH) Rnl J 

Wertcoast Trans! 

Weston (Geo). 


BIS 

26% 

18% 

22% 

16% 

6% 

16% 

ii 5 * 

27 


GERMANY 


1982 

High | Low 


43% 

30% 

31% 

29% 

33% 

9% 

28% 

38% 

7 

32% 

207* 

36%. 

9% 

41% 

15% 

28% 

16% 


26% 

12% 

23% 

22% 

"i* 

123 

26% 

16 

29% 

7% 

30% 

107* 

14% 

10% 


Wheel ob ratr F— 
Wheeling Pitta 

Whirlpool 


White Coneottd-| 

Whittaker. 

Wiolces 

William* Co. 

Winn-Dixie str, 

Winnebago— 

Wise Elec Power] 

Wotfworth 

Wrigiey 
Wyty 


xerox ] 

Yellow Frt ftp* 

Zapata- 

(Zenith Radio 


18% 

13% 

297a 

245* 

21J# 


15% 

36% 

6% 

30% 

187, 

33% 

87a 

31% 

15% 

ir* 


Indices 


NEW YORK 


— DOW JONES 


July 
I 2 


elnddstrfie 
H* me Bods. 
Transport- 
DtllWas 




106. 


Tr ffl V ° l k3,7SS:47,»fl|66^«l 


July 


io6 ^aj 


June 

30 


VTM B6.U 
[514 JsirJsa-B* 31U7] 


107.70 


June 

29 


anxjni 


ioc^d 




June 

28 


June 


25 


IIURSaSM] 687.58 

, . 

OM .66.46 ” 


6HZ7 
, . 127 fi) 

8MM|316JS] JB8.48 


1W5T 


mu 

. 


1982 {Since CmplPttn 


High 


(7/1) 

Ilk* 

dlBi 


Low High Low 


m.e -hstjoI 

(W6) ‘0171/75) (8/7/56) 

ffijn | - 


Ctt®, j 


JB5.7S ( 447 J51 | TZJ2 
(M/8) flBUfBT) (Iff/M) 
165.61 I 1H.H 105 
(WQ (MMriS) ffWMO 


« Day's high 803,ia tow tbs.sh 


• { June 85 

June 18 I June 11 Yaarago (Approx 

I BJ* 5 

7.08. t 6J90 > 6J50 


STANDARD AND POORS 


June 




122.89 


WM 

\ 1 (AtTi 

•’i5.sd 798.14 122.74 


1982 {gnceCmpH^'n 


High 


(4/D 


Low High 


IBB 

W1 


718.41 18WI 

dm minim 
VRJB ■ nwal 
(Si.B) 


Low 


J_S2 

(mm 

4.407 

mssa 


Induat'l div. yield % | 

_ 1 

June 30 

June 83 | 

| June 16- 

SJB1 

- 5.59 1 

3,97 

indurfl P/E ratio 

7JM 

7.7B | 

- 7.65 

Long Gov. Bond yMd 

13.73 1 

-'--MAS ! 

13,66 


4.95 


9487 


13,27 


NY. AElAU COMMON 


Rises and Falls 

• July 9 | Juiyl uune30 


July July June 'June 
2 V i f SO- 29 


18 ? issues Traded ;i,7M jijfigc ji,855 


High 


61,9962.61 63.0263 J8‘ 71 JO 

j ; ; i 


Low 


RiaM 


Falls 


506 

857 


61.73 

(21/5) - 


Unobaiigad.— j 436 
Naw Hlgfis™..™ — i 

New Lows -,™J — 1 


460 

910 

450 

14 

69 


801 
603 
451 
29 
. 37 


-MONTREAL 



Industrials 

Combined 


July 

2 


July 


25MS! 
257 JM 


to) 

(0) 


June 

30 


Z54,(tt[ as. 


auLSi 


1982 


June! 

29- ! 


High 


TORONTO Composttej 1359JBV (o) I lUflajj -18&&3 (4.1) 


£«Lffi 


5S2JS (4.1) 
51U8.(4.U 


Low 


249J8GI/6) 

mjimisi 


1555J (21/9) 


Friday 


NEW YORK ACT1YE. STOCKS 

, . Change 

Stocks Ctoshig on 
" traded . pries day 

. 507,500 35% -1% 

IntL Mllb 482^00 26V - \ 

— -i Citicorp. ...... 432J00 3ff» — 

KcSi:"" %- -ts ^ -’i 


Chang* 

Stocks Closing on. 

• . traded price day 

Sony 1^73.100 7 v SohhirtbeigBr 

708.000 13V *r % L n ,lLj “ lr ’- " 

‘S V. 652.700 7.J* Citicorp. 





July 

2 

Jidy 

June 

30 

June 

£9 

High 

L082 

Low 

AUSTRALIA 

AllOncLOll/SS) 

Metal ft Minis. OrtlM) 

MLS 
591 J 

478.9 

6SBL8 

475.1* 

5S7J 

47M 

5BU 

MW (4m 
425.1 (5/1) 

.4654 (10/6) 
20*4(28/6) 

AUSTRIA 

Credit Aktien (2/1/ 92) . 

45.16 

4L94 

48.M 

48 M 

MJN'CVQ 

4*40(21/1) 

BELGIUM 

Belgian SE (Birre/SJ) ■ 

tut 

. 5L44 

KJD 

sua 

101.45 (6/4) 

15.42 (M/t) 

DENMARK 

Copenhagen SE (1/1/73) 

m.54 

11L86 

711-64 

iTiji 

12822(26(2) 

189.55 (18/9) 

FRANCE • J 

CAS General (31/12/81) 
Ind Tendance (SI/1L11) 

•73 

181.7 

nj 

109.1 

9U 

noj 

88.8 

1UL4 

1114(05) 

1244(06) 

954 (4/1) 
«7J(4n) 

-GERMANY 

FAZJilCiien (51/12/Bi) 
(kHnmerztMutidPOOlSSS) 

2B.BS 

8MJ5 

226.47 

691.4 

fUjJ. 235.74 
684.4 1 G8U 

ZS945 (5/4) 
7284 m 

21945 OVD 

B8U (18/D 

HOLLAND 

ANP-CBS General 0978) 
-ANP-CBS Induct (1378) - 

•M 

■67.8 

«L4 

67.1 

86 J 8L8 j 88J0 (IB/S) 

VJ B7.6 j 74J OO/B) 

844 (M) 
654(40) 

HONG KONG 

Hang Sang Bank (51/7/84 

1274JS 

(0) 

WLBsjuiaJBi 1448^2 (12/1) 

1128 js m 

ITALY 

Bence Comm ItaUinS) 

1BBJB 

15L79 

1S4.G7 

! 

15L27] 312.66 (ti/3) 

15347(29/6] 

JAPAN” 

Dow Average (ll/MR" • 
Tokyo New SE(4/1« . 

IBM .87 
NLU 

717919 

721L87 

SSSJSj 

7180,70 7626^6(27/1) 
628.881 B82JH (27/1) 

886945(17/5) 
020.70 07/5 )■ 

NORWAY 

(Mo SE (1/1/72) - i TIILSB 

11L21 

11LE7 

11E.54 120.59 pS/7) 

108.12(1/0 

SINGAPORE 1 

Straits Times (UBS). ; miB 


702.14 

638 B1DJBCB/1) | 687,48 (9/5) 

SOUTH AFRICA . 

Gold OB681 

Industrial (1958) , 

. 

«U 

5UA 

SUM 

6UL7 

1 ! 1 

Ki7.8l5BS.Bi S68J (5(1) 1 541.1(21/5) 
B13 j*|B07J| 711 J (8/1) { 507^ (29/6) 

SPAIN 

Madrid SE (SO/12/81) 

91 JZ 


M.aaj (o 

VO Ai (9/2) . { 814507) 

SWEDEN 

Jacobson ftp. (1/1 tart 

mjtt 

881-69 

i 

sta.Bi bmjh 

85842(22/1} ! 68542(28/4) 

SWITZERLAND 

Swfss BankCpnJT1/1ZA8) 

341.6 

245.0 

244J j 245.4 

28S.10U7) \ 241.4 (21,6) 

WORLD 

Capital IntL (1/1/70) . 

•- 

T2SJ 

m< ! 

1474 (4/1) | 125J (21/6) 


1982 

High | Lew 


329 

420 

148 , 

370.6| 

146 

145.2! 

646 

451 


113.21 

300 

125 

30B 

125.41 

86.4] 

617 

386 


286 
191 
158 
1.751 
95 
•150 
130.2] 
- 272 
520J2 
145 


'228 

170 

124 

1.400 

81 

122 JB 
113 
167 
465 


July 2 


Andelebanken — | 
Baltfca Skand ™j 
CopHandeleban 

D. Sukkarfab 

Danaka Bank.— 

East Asiatic 

Foreneda Brygg. 
Forenode Damp. 

iG NT Hldg 

Mydake Bank 

Nord Kobe I 

Novo Ind 
Paplrfabrikker— 
Privatbauikan. 
Provlnabankcn 

Srnldth in I .[ 

S. Berendsen «.— ; 


87ft[8uperfoe. 


Price 

X 


113.6 
J325.4 
Ml 28 

87 

si; 


1831.0 

175 

125 

1,685 

&1 

122J 

119 

190 

|500 

95.6 


AUSTRIA 


( M ) Saturday June 26: Japan Dow 72KLS0. TSE S3U0. 

Base nduaa ot'all lodfaraa an 100 excapt Australia AH Ordinary and Marais—. 
BOO. NYSE AM Common— -SO; Standard sod Poore— 1ft and Toronto— 1.000; the 
last named baaed en 1875. tExohufing boods. *400 tndostrtrta. *400 
todunriala plus 40 UtlhtiH. 40 Fiaandala and 20 Tuuuiparra. cClosad 
, ‘at a. 


. 1082 
High ! Low 


222 

204 

301 

108 

17B 

210 


206 

180 

258 

64 

145 

155 


July 2 


Credit' etalt WdJ 
LaendarbankPfd 

Parimooser 

S«m perit_ — _ 

Steyr Daimler^^. 
UeRachcrMag 


Price 

% 


206 

180 

270 

68 

145 

168 


BELGIUM/UJXEMBOURG 


1982 

High | Low 


1,700 

4.100 
2,160 
1,845 

215 

2,050 

4,740 

2.950 

2.720 

1.720 
1^50 
3^750 
1J170 
5,130 

6.100 
5,020 
5.600 
2,340 
1,575 

3.950 
2lB50 
2,940 
2,480 
2,140 


1010 

[3.900 

1/450 

1,230 

139 

1,660 

3,240 

2,000 

2,180 

%200 

1,490 

2.650 
1JS98 
14,000 
15,600 

SJSS 

1.650 
1,030 
3,100 
1,520 


1,400 

1315 


July. 2 


Price 

Fra. 


lARBED 

Bank Int A Lux _. 

Bekaart B™ 

Clmant CBR ■ 

Cockertll 

FEES 

Electro JMl 

Fabriqua Nat .... 
GX. Inno— - 
GBL (BfUX L.)™... 

Gevaert [ 

|Hoboken 

Intercom j 

Kredletbenk, 

Pan HJdga~ ! 

[Petroflna ™— 
Royale Beige... 
£oc. Gen. Banq J 

raoo. Gen. Belgc~j 

jSofiira—^— „.™ 
pohoy™...™. m.,- 
Traotion Elects.. 
luCB 


hrieine Mont 


1,100 

4.100 

2.100 

1,422 

139 

1610 

4.060 
2,400 
2,545 
1,368 
1,760 
2,970 
1,300 
4,610 

6.060 
4,496 
5,100 
2^05 
1,166 
3/400 
1,865 
2,600 
2JJ70 
2^140 


46JI 

479 

138 

204 

217 

300 


229.6} 

218 

235 

155 

66^1 

303.5 

258 

144 

216 


287.51 
183 

167.51 
213 

70 


127.41 
27JSf 
431 
123^1 
180 
212 
176,6} 
193 
69.7i 
61.6 
390 
74^ 
197 
163 
26S 
272 
600 . 
207 JJ 
176 
291 
295 
230 
92.1 
186 
134.5) 
290 
1B3A\ 


B8.8|AEO-TelefL 


420 
110.3 
105 JB 1 
179 
263^1 
189 , 
189.6 
187.5 
128 
42 
275 
208 
123 
172 


UUIIanz Vera™-- 
BASF— 

BAYER 


[BMW, 

Brown BovorLL 
toommerzbank— ! 
[Conti Gummi. 
Dalmler-Benz-_.| 
[peguasa ! 

fevlohe BaboockJ 


261 

141 

129.3 

178.5 

47 


107.7 

19-ft 

384 

102 

134 

176 


130 

168 

IP 

vr 

154 

135 

201 

197.51 


July 2 


Bayem-Hypo ™. 
Bayern-Verein.. 

BHF-Bank. 


Deutsche Bank— | 
IDU Schult- 
D read nor Bank— 
GHH— . 

Hapag Lloyd— 

Hoechat — — 
[Hoesoh + 

Holzmann (P) M 
Horten — 
Kallimd 


Kaufhof. 
KHD . 


Kioeckner. 

Krupp 


Manneamann — 
Merced ■* Hlg — 
MetallgeaeJI 
610 jMueuch Rueck _j 

182.7|preu»*ag — 

160.5iRheln West Eectj 
247 Rosenthal 

270.5 Schering — 

198^ Siemens ; 

71.5fThy**en 
lSB.HVerta— 
123^Veba 


268 hrerelh-West 

129 IVolkswagen. — .] 


Price 

Dm 


33.6 

470 

114.6 

109sl 

210 

270 


20B 
ZS 1.2X1 
177.7 
154.6 
47 

803 Jl 
208.5 
123 
190 


863.1 

174 

138 

1B4 

54 


111.2 

30.5 

413.5 
123 
149 

215.6 

176 

1B4 

56 

68.3 

285.1 

66 

165.5 
134 

267.5 
197 
662 

184.5 

167.7 
252 

271.5 
219 

85J, 

147 

127 

268 

141.7 


FRANCE 


1982 

High I Low 


1,636 

6/190 

2370 

4&7 

113.1 

115 


July 2 


Emprunt4Bt 1STH! 
Emprunt 7% IB71. 

CNE W 

Air Uauide™— , 

Acqultaine 

Au Printempa 


Price 
Fl 




1,69 

6,260 

3,190 

466 

114.5 

136.5 


550 I 380 
1,210 802 
1.56S 1,160] 

snaS 

620 507 

260 127 

230 157 

35B.a 259 


me.. 


Bouysue*.™™ 
BSNGervals™ 

[Car ro four 

Club Medltor, 

|CFA0 

toFS (Thomson)—! 
toie Ban Cairo.. 
Cla Gan Eaux. 


470 

612 

1,298 

1,397 

511 

524 

127 

158.1 

280 


.Slcrei 


Cofimeg. j 119.5 

usot Loire— 73 £ 

ICFP — '115.1111 

[DNEL I 47.4 

toumaz™ —.1,075 

|G«n. OcddantalJ 412.1 

matsi— 5i 

Lafarga 216.1 

L'OraaJ 893 


1 l 370j Leg rand™..— 
25.4{Machihea Bull™.! 

J,193^taira 

SOSjMichatlnB. 

640 Moet-Hannesay- 
6ft5 Moulinex ~ 

2733 Pernod RIoard.. -i 
146.5 Perrier 
129 pPeugeot-3A 


1,456 

30.7 

1,416 

60B 

730 

SB S 

3391b 

160.5 

129 


IPccIaln , 


Radio to oh — — 

Redoute 

Rouaad-Uolar — 
JSkls Roaalgnoi „j 
Tfelemeah EleoLj 
[Valeo 


118 

247 

884 

B76 

562 

732 

176 


HOLLAND 


1982 

High I Low 


87.5 
86.9 
31J! 

304 

93.7] 

56 

804.5; 

70 

47.6 
37 


July 2 


69 ACF Holding— 
50 

22AAKZ0 


161J 

151 I 


151 , 
75.7| 
76.1 
63.7 
183 
9 

25.7! 

115.51 

30.4] 

118JK 

WJB 

147.5) 

140 

115J5| 

40js! 

45.4 

30J»| 

38 

222.5 

124.4 1 
217JI' 
152Ji 
94^ 
S53 
232 
162.1 
140 
54 
62.9 
B7.6| 


270 |A8N_. 
78,0jAMEV 
46 
161 
40^ 

332, 

28.61 
13L2 
106 
69 

61.5 

47.6 


AMRO™. 

Bradaro Cart — 
BoataUia Wastm. 
Buhfmann-Tat — 
Caland HldS*— 
Elaevier-NDU m 
inn 


prlca 

F1> 


lEuroComTst 
jOistt-Brocadet— 
Kelneken 


13.9 Hcegcvens — 
6.0iHuntar Douglas . 


18.5|lnt-MuMar— — 

86 KLM.™ - 

22,1 Nmarde'n 

104 ,Hat Nad Cert 

873 Ned Crad Bank« 
i09.8 Nad Mid Bank - 

10B [Nedllcyd 

68.0iOoe Grinten — 
Sl.filOmmeren (Van). 
37.5IPakhoed — 

BO^IPWIIIp*. 

£1.5 Rijn-Schaide ...™ 

Robaco ......... 

Rodamoo............ 

Rollnco— 

Rorento 

Royal Dutch 

Siavanburg'a.— 

(OkyaPaaHg 

Unilever 

Viking Res-.— 

VMF Stork — 

VNU.... 

Wert Utr Bank— 


200.5 

118J 

16BJJ 

135.3 

71.8 

712 

175 

143 

94 

38 

48 

61 


77JS 

80.2 

23.7 

'279 

S6 

46.6 
1168 

40.5 

38.7 

28.5 
149 

[120.6 

74.5 

70.6 
57.B 

14.5 
8.4 

18.5 
8&6 
22.1 

!U3J 

27.B 

116 

H18.6 

103.6 

81.7 
38 
22,9 

, 86 
[80L2 
123.0 
lfltia 
158.8 
64 
80.4 
188 

143.7 
109 

44 

68 

71.6 


NORWAY 


1989 

High | Low 


118 

155 

3S5 

54 


386 

246 


103.5 
100 

187.5 
45 

300 

248.6 
175 


July 2 


Price 

Kronor 


Bergena Bank — 
Borregeard ™__J 
Or adit bank— ~. 

Elkam 

Koamos 

Norsk Hydro. 

[Storebrand 


106 

106 

130 

46 

500 

269 

IBB 


ITALY 


1982 

High | Low 


159.800 

39.000 
2551 

If 

3,400! 

43.000 
160^5 

3,040 

3,405 

1,580 

840 

20,100 

15,890] 


,124,000 

30.000 

2,1101 

ej|d 

2.101 

l k& 

2.190| 

2,05011 

1,182 

605 

10.000 
7.520 


AulcurGan. | 

BanoaCom'le^ 

Baatogl Fin 

toentral b.— 
Cradlto Vareslnol 
Rat 


July 2 


Rnsldar — 

Invert 


taJ cement! 

Montedison ™_ 

Olivetti 

Pirelli Co.™..™... 

Pirelli Spa 

(SnlaVisooaa. 

[Toro Asslo. 

do. Pref — 


Price 

Uro 


,127 JKH) 

“hK 

2,340 

6,730 

1,619 

27.76 

2,101 

w 

2/240 

2,140 

1,850 

645 

10,650 

7,855 


AUSTRALIA 


1982 

High | Low 


4.78 

1.69 
1.73 
19A 
0.12 

1.78 
2.52 

3.15 

2.15 
3J» 

1.70 

2.70 
3JS0 
1.44 
8.60 
4JS5 


3.66 

1J0 

LIB 

1.45 

0.06 

1JB 

8.00 

1.62 

2.60 

1.15 

1.06 

2J2 

L02 

1JJ8 

2.35 


July 8 


ANZ Group 

AcrowAust— 

Amool 
Assoc. Pulp Pap. 

Audimoo ... 

Auat. Cons. Ind™ 
AusL Guaranfc— 
Auat, Nat. Inds™. 

Auat. Paper.. 

Bank NSW 

[Blue Metal 

Bond Hldgs— 
Bora! 


Bl'vlUa Copper... 
iBrambles Inda.... 
(Bridge Oil— . 


Prioa- 

Aust.5 


3.72 
1.30 
LIB 
1J55 
0.10 
L39 
SL2Q 
2.54 
L63 
2.56 id 
1.35 
1.10 
8.40 
1.10 
1^2 
3.4 


10.46 

0.90 

335 

4.00 
2.60 
3.90 
0.71 
0A0 
1J57 
2.50 
2JJ0 

3.00 
1.06 

4A 

4.4 

L85 

8J>0 

L45 

L90 

L35 

0.50 

1^0 

0.44 

3.45 

3.10 
IL34 
0.17 
1^0 
8.88 
2.60 
L45 
2.65 
2107 
LIS 

2.56 
0J25 
1 JBO 

oja 
2.40 
7 JOO 
UO 
0.60 
0JS7 

2.57 
3.00 

2.10 
0.18 
0.90 
4.10 
U6 
L79 
2^5 


610 

0.14 

8.40 

2^0 

1JB1 

3.27 

0.36 

0JS7 

1.18 

1JM 

1.45 
1.30 
0.88 
2^0 
0,14 
L48 
UO 
0J90 
L46 
1.03 
0.16 
L35 
0.10 

8.45 
1.70 
0.13 
0.04 
1.23 
2.33 
1.66 
1J5 
L68 
1.10 
OftB 
L83 
0.09 
1.22 
0.07 
1.60 
3.B3 
0.65 
0.84 
0.14 
1.77 
LBO 
1.35 
0J17 
0J5 
£.86 
0A6 
1.32 
2.25 


^nmawlck 6TH— 


(Carlton ft DM... J 
toaetiemaineTyaJ 
{Cluff OH (Auat)— I 

Do. ODta..™. 

ICockburn CemL| 
[Co-lea (GJJ 
[Comaico. 


iCoataln— ™— — _ . 

Dunlop. 

Elder Smith GM. 

Endeavour Raa— 

Gen Prop Trust— 

Siartogen Energy 

Hooker 


ICI AusL™. 

pannings 

pimb7ana(50cFP| 

pone* (D) 

(Lennard OIL....... 

M1M , 

MeeKathami Ma[ 

Meridian Oil 
Monaroh Pat—... 
[MyarEmp. 

Nat. Bank 


News - 

Nicholas Kiwi 
(North Bkn Hill™.. 
Oakbridge™— 

Otter Expt- .' 

Pancon 

Pan Pacific 

Pioneer Cone— — 
Queen Marg't G„ 
ReoklttftOom™. 

Santos 

Sleigh 

Southland M'n'g. 

Spargoa Expl 

Thos Natwlda 

Tooth —| 

UMALCone. 

Valiant Conmdt— | 
Waltons Bond- , 
Western Mining. 
Wood side PatroLl 
Woolworths™— i 
tWormaid inti™ 


6.90 
0.16 

2.78 

9.04 
1.88 
3.75 
0.46 
0.37 
1.30 
2.10 
1JBQ 

1.4 
0.95 

2.85 
0.16 
1.48 
2.00 
092 
L56 
L18 
015 
1.70 
0.13 
2.68 

1.90 
0.15 
0.08 
1.35 

8.42 

125 

LIS 

L72 

1.40 

098 

1-36 

0.11 

L87 

0,08 

L70 

4.7 

1.15 

096 

0.19 

LBS 

3.00 

1.78 
0.09 
0.68 

8.86 
0J67 
LM 
2.55 


SINGAPORE 


1082 

High Low 


SJ8 

4.4 

8.7 
6.75 

3.7 
2J6 

7.7 
5JB 

12.7 
ojn 

7.3 
4 .08 


LBS 

3.54 

7.1 

6.18 

2.6 

1.76 

6.4 

4.58 

8.0 

1.96 

4J6 

3JI8 


July 8 


Boustasd Bhd 

Cold Storage 

DBS 

Fraser ANeave.. 

Haw Par— 

Inchcape Bhd.- 
Malay Banking— 
Malay Brew™.... 

OCBC 

Sima Darby 

Straights Trdg „ 
UOB...- 


Pric 

S 


L87 
3,74 
7.70 
5.90 
2.73 
3.04 
MO 
4. 86 
8.18 
1J09 
5.55 
4.08 


SWEDEN 


1082 

High | Low 


2841 

219 

200 

428 

134 

254j 

286 

95 

228 

175| 

2171 

150 

163 
141 
841 

260 

164 

13? 

125 

164 


ISO 

197 

187 

350 

101 

156| 

212 

81 

192 

llfl 


1201 

91< 

los! 

121 

168)! 

440, 

191 

US: 

% 

100, 

129 


July 2 


AGA 

Alfa-LavaL. 

ASEA (Free) 

Astra 

I Atlas Copco. 

Bond an 

Cellulosa— 
□octrolux B™..„ 

Ericsson — 

Easel te (Free). 


Fagersta 


Fortla (Free) .. 
Mooch Dom - 
Saab-Skanla ., ... 
Sendvik (Free) — 

Skjuidla— 

Skan Enskllda .. 
SKF B 

St. Kopparb«rg_ 

Sven Kandalsbn. 

Swedish Match J 
Volvo (Free)™, 


Price 

Kronor 


197 

205 

ISO 

426 

108 

165 

213 

81.5 

218 

141 


135 

147 

105 

132 

169 

490 

208 

114 

272 

100 

108 

150 


SWITZERLAND 


19B2 

High | Low 


July-2 


675 

1,160 

1,345 

1.060 

2.310 

MTjri 

63,5001 

i 

1,100 

s^sb! 

1,485 

239 

4,450' 

548) 

290 

750 

325 

6,600 

1.030 

3.310 
2,425 

15,100 


Prfoe 

Fr*. 


428 

860 

1^00 

1,000 

1,610 

2,260 

396 

54.750 

8.475 

6,528 


428 Alusuteae 

850 Brown Boveri. 

1,170 Clba-Galgy 

910 do, (Part Carta). 

1,610 Credit Suisse— 

8,190 ElektrowatL— 
®96iFHher (Oeou 

54,2 BOJHoff-RoohePt Cta 
5,40 O[Hc f f- Roche 1/10. 

5^260 Into rlood ! 

l.lSOUalmoll j 1,255 

7B0<Landisft Gyr— J 790 

3,070;Nestle j 3,190 

1,030 Oer-Buahrta.™... 

SlOjPIroUl— 

3^75<Sandoz (Br)~ 

497jSandar (Pt Cts). J 
238lSchlndlorCPtCtt)l 

63S[Swtwalr 

_ 274|Swlas Bank. 1 

6,7E0Bwfn Relnsca I 

850 Swiss Voikstot™. 

8,720 Union Bank 

2,050 Winterthur. 


1,060 

213 

3,025 

540 

275 

672 

274 

5,000 

060 

2,740 

2,140 


14,300 Zurich lns~ 114^00 


HONG KONG 


• UBS 
High I Low 


22J> 

8 

11.7 

150 

6.7 

2.95 

».65i 

12Z 

34.25 

1B.5 

ia.6 

5.151 

6^51 

9.2 

12.5 

6.9 

5Z 

3J5 


July 8 


Price 

HKf 


14.4 Cheung Kong — 

1.66 Cosmos Prep — 
10.1 Croat Harbour.... 
87 Hang Seng Bank. 

4.67 HK Electric..—'. 

4.07 HK Kowloon Wh.l 
6.45 HK Land. -I 

HK Shanghai BK. 
HK Telephone.™: 
Hutohlnn Wpa. 


93 
953 
13 3 


3.5 


12 3 (jardlnoMath — 


iNaw World Devw 


4.7 [O mbs Trait BK-; 


5.5 


ISKH Props ! 


8.8sJswlre Pac A. 1 


43 

4.6 


Whserk ward A.; 
Whaal'k Maritl ej 


2J27tWortd Int. Hldgs.] 


15.0 
L70 

10^ , 

87.5 ' 
6.15 
4.57 
7.4 

1L1 

31.6 
15.5 
16.8 

3*5 

5J50 

7.00 

11.1 
6.55 
4.6 
8.67 


JAPAN 


1982 

High | Low i 


July 3 


Price 

Yen 


949 

720! 

7131 

462] 

1 , 010 ! 

337 

650[ 

485 

766 

4251 

41El 

469 


835 

508 

474 

436 

687 

251 

619 


1,040 

5031 


1,520) 

1,500 

6,780 

2,290 

605 


377 

390 

360 

815 

500 


725 

575 

864 

1.130 

834 

345 

436 

L04O 

629 

2,420 

714 

376 

570 

873 

4581 

445, 

1,010 

510 

530 

669 

342] 

473 

4,140] 

416 

642 


889 

340 
701 

i.ooo| 

1,560 

516 

505 

635 

341 
475 
260 
359 
680 
420 
559 

1,200 

739 

412 

1,130 

995 

182 

275 

4,600 

866 


358 

170 

596 

318 

1,140 

1,510 

1,840) 

802 

707 

515J 

273' 

7981 

860 

900 

3,960) 

390 

625 

300 

643 

1,090 

4,130 

257: 

975| 


480! 

sis: 

970 
117 
624 
217 
394 
439) 
437 
1 , 110 ) 
2,890 
7 80 1 
936| 
600 
31Bj 
631 


795 AJInampto ....I 

606|Amada.... 

474'AMhi Class. 

39 fl:Brid9Crtone 1 

643 Canon,. ' 

268, 'citizen 

600|DaiBl 

359|DKB0 I 484 

360, Dla Nippon PtaJ 611 

363|Dalwa House : 

355 Daiwa Seiko. I 

353 Ebara 

490 Fuji Bank ! 

1,190) Fuji Film.™ 11.370 

1,140, Fujiaawa 1,300 

4,150 FuJltsu Fanuo.™ ]4,550 

1,710'Green Cross ,1,960 

539,HasevswB —I 539 

SOllHeiwaRL East— I 542 

550; Hitachi I 569 

437 1 Hitachi Kokl '■ 477 

882 Honda —I 705 

930 House Food— JL01O 

eiBlHoya — 696 

277jltohtCI™ 277 

SfiAlto-Ham.,.,,. 1 390 

77D[lto-YokaiJo 832 

397UACCS [ 400 

B4lLlusco 568 

316,KaJlma 316 

480, Kao Soap- : 500 

740:Kaahlyama 795 

351 Ktkkoman —I 56B 

406'Klrin - -I 438 

865|Kokuyo I 880 

431 Komatsu.- : 471 

350; Komatsu Flft ! 350 

5l9|Konlthrolku^. ! 675 

330) Kubota 331 

SBllKumagla 1 384 

3,a60)KyotoCeriunic... l 3 ( 540 

363:Uon- 365 

503]Maeda Cons.. i 


515 


703]Maklta 


275| 

553 

7B6; 

902 

494] 


Marubeni • 

Marudai 

Marui t 

Matsushita ...— ...i 
Mta Elec Works 


484fyrblshl Bank. 1 


487 
232 
417] 
183 
2981 
580! 
343 
438 
89 Oj. 
631 
371 
871i 
7B0^: 
137 

2 oai 

3,800 
710| 
320! 
143 
39 5] 
246 
73A 

5 J!§ 

666 

443 

391 

243 

648! 

622' 

761' 

2,960' 

321 

2191 

603 

213 

560 

780 

3,080 


3 


725 

283 

557 

893 

995 

501 

500 

501 
233 


M' bisill Corp , 

M'blshl Elec 
iM'Wshi R) East-! 422 

MHI I IBS 

Mitsui Co | 315 

Mitsui Rl Est 608 

MitsukMhi 345 

NGK Insulators...] 442 

Nippon Denso — j 995 
Nippon Gakkl .J 634 
Nippon Meat ...... 371 

Nippon Oil 874 

Nippon Shlnpan 753 

(Nippon Steel 137 

Nippon SuLsan 221 

NTV 3,940 

Nissan Motor— 1 806 

Nlsshln Flour I 332 

Nlsshin Steal | 146 

Nomura i 398 

NYK. 246 

Olympus. , bob 


Orient.- - 11,260 

Pioneer- .—{1,470 

Renown— 

Ricoh- | 

Sanyo ElooL 

Sapporo ] 

Sekisul Prefab 
Sharp .. 


Shiueido 

Sony 

Stanley 

S'tomo Marina _ 
TTalhel Dangyo™ 

[Talsel Corp 

jTaisho Pharm™. 
•fTakeda— — 
[TDK. 

BOWTelJIn...— 

726fTaltoku Oil 

44^okyolflarin(u3| 
8Z0[Tokyo ElecLPwr. 
107 [Tokyo Gas^..™.. 
398 (Tokyo Sanyo,— _ 
ZDOjTokyu Corp — _ 

290 [Toshiba 

405rroT0 

417rroyo Balkan™. 


716 

464 

410 

262 

680 

775 

824 

3,220 

341 

£20 

503 

225 

588 

785 

3,830 

812 

880 


B15 Toyota Motor™. 

L650 Victor 

700 Wacoal 

666 Yamaha. — 

517 Yamazakl™ — 

231 Yasuda Fire , 

491 Yokogawa BdgeJ 


427 
442 
828 
107 
429 
203 
306 
405 
437 
, 895 
2,160 
720 
665 
519 
231 
501 


SOimi AFRICA 


1982 

High j Low 


4.50! 

9.9 

16JI 

105.25 

3^5 

10.6 

45 

73 

3.05) 

8,681 

30 

41 

93.0 

5.65| 

9^ 

38.5 

6-20) 

2L5 

3.7 

11.65 

5.75 

5J5 

3 

5.15) 
22 

4 


2.10 

6.00 

B^O 

59.00 

2.05 
6.55 

27^0 
4.95 
1JB 
3.97, 
19.6) 
19.8 
46ft5 
. 3.7 

5.5 
24.75, 

4.951 

14.50, 

1.85j 

8.10 

3.3 

2.65 

2JD 


July 2 


Abercom 

AE ft Cl 

Anglo Am. 

Anglo Am. Gold. 
Anglo Am. Prop.. 

Barlow Rand 

Buffet* 

CNA Invest 

Currie Finance. 

De Baers... 

Driefoirtein ™„— i 

FSGeduld 

Gold Fields SJV— 
HIghvald Steel... 

Huletts 

Kloof- 

Nedbank 

OK Bazaars 

Protea HMga™... 

Rembrandt 

Rennies.— 

Rust Plat 

— Sage Hldgs 

3.75SA Brews 

15 {Tiger Oats.™ 1 

2.96] Unlsec 


Price 

Rand 


2.30 

6.0 

B^al 

60 

2.05 
6.70 

29 

4^5 

2 

4JI 

20.35 

23 

47 

3.8 

5.6 
26JB5 

5.1 

14.6 

2.10 

8.2 
3.55 
3.15 
2.10 
3^0 

17.00 

3^ 


Financial Hand USE0.77} 
(Discount of 11%). 


BRAZIL 


1982 

High Low 


July 2 


I Price 
Cruz 


L32Aceslta 

9.45] Banco Brasil-™. 

3.1 (Beige. Min 

2-35; Brahma PP [ 

fi.s?(u>gas Amer- i 

Z.OOManriCsmann 0P[ 


Petrobras PP j 

Souza Cruz. 

Unip PE.. 


7.6 [Vale Rio Doce._ 


1.68 

16J95 

5.40 

6.75 

6.75 

2.60 

12 j 00 

10.90 

8^0 

15.70 


TEL AYIY 


Company 


Prices Change 
July 4 on the 
1982 week 


Banking, Insurance 
and Finance 

Bank Leumt le Israel... 

IDB Bankholding 

Bank Hapoalim Br. ... 
Union Bk. of Israel Br. 
United Mizrahi Bank ... 
Hassneh insurance Br. 
General Men. Bank Br. 
’Tafahot" lari. Mu Bk. 

Danot S/0 

Land Development 
Airies Israel inv. ICIO 
Israel Land OevpL Br. 
Pmparty and Building... 
PuWic Utility 

Super Sel “A” 

Investment Companies 
Bank Leumi Invest. ... 
*' Clsl '■ Israel Invest. 
Discount Invest. 


1.451 

2.320 

1.925 

1^96 


1,940 

880 

2^00 

342 


+ 32 
+ 32 
+ 78 
+ 45 
+ 25 
+160 


+ 5 
+ 37 


4.400 

1.690 

2.065 


+2SB 
+ 55 
.+195 


1.500 — 


- 1 

+ 32 
+ 66 


637 
973 

1,225 

Commercial and 
Industrial 

Dead SM Works 2.475 — 

Source: Bank Leumi le Israel BM. Tel 
Aviv, i Bid. 


NOTES: — Prices on this page are as 
quoted on the Individual exchanges 
and are lort traded prices, t Dealings 
suspended, jed Ex dividend, xe Bt serin 
w*iis f Et rights, xa Ex all. 






X 




22 


CURRENCIES, MONEY and GOLD 


MONEY MARKETS 


A more relaxed attitude 


FT UNIT TRUST INFORMATION SERVICE 

aaSBZM ™ AUTHORISE® TRUSTS 




A slightly more relaxed atti- 
I tude pervaded European money 


markets last week as the upward 
pressure on Eurodollar interest 
I rates abated. With half-year 
I book squaring out of the way, an 
! easier trend In the Federal funds 
I overnight rate, and a surpris- 
ingly large fall in the previous 
week’s Ml money supply figures, 
market nerves were somewhat 
. calmed. 


There was no si gnifican t 
change in Bank of England 
money market dealing rates, 
apart from setting a general 
level of 12 ft per cent for band 4 
164.91 day) bills, compared with 
the previous range of 12j-22ft 
per cent At the same time the 
key seven-day interbank rate 
has been very steady at around 
12}-13 per cent, suggesting that 
the slight upward adjustment in 
, the rate at which the authorities 


buy bills from the market was 
simply a reflection of nervous 
conditions early is the week. 

As U.S. rates moved up In 
recent weeks the discount 
houses became less inclined to 
hold longer dated bills, and this 
point was born out at the June 
25 Treasury bill auction when 
applications fell to £3 90.8m from 
£523.55m for the -same number 
of £100m bills, while at last 
Friday's tender applications 
recovered slightly to £422. 7m, 
and the average rate of discount 
fell to 122313 per cent from 
122696 per cent. 

In Paris the Bank of France 
took advantage of the more 
stable situation with regard to 
U.S. rates, and cut the general 
level of French interest rates. 
On Friday the level at which the 
central bank supports the 
domestic market by buying first 
category paper was cut to 15 per 


cent from ’ 15$ per cent Call on Tuesday, but then rising to 
money was left at 15} per cent,. 8} per cent on Thursday as 
after failing seven times from liquidity tightened due to tax 


UKGroSflT. 


16} per cent since the devalua- payments ami sales of Govera- 
tion of Hie franc in the middle raent paper. 


Of last month. 


Zurich, 


Elsewhere in Europe interest reduced time deposit rates. But 
rates were little changed, in Frankfurt. Bundesbank credit 


45 ,CWT*#m»toqrav 3 PB. cn-t3! 

That HM, , . WM — I 

AlScd 1 lantern Ltd. (a) ( 9 ) 


descent in* 7* Mngre. Ltd. feXs) 
«UetvBteCm.Edflbmt>3 0SI-Hb3«Z 

Era. America gf-S j*5j -g-« 

cIS hSJdwZt: if! TS,i 

8£IEK£=!=H tO g 

Ok. Tokyo. Oil 37.41-03 


t a C unit 

TteS»DliE«J«W.L**n EC «3^_ tTP •)«.» 

ffiSsaU'JEK :tJ 


Lqal & felgOlWf Tit* 

5 Bwh*ri P4, * > 


nssssssT’S-w a 

sss.n-i B-. 1 ja aitg 

f»C vu». - ^ a * 


"»-w- 


OvUngtan UnB Trnst MagL Ltd. 
Lbrttam Toe**. omiTO&ie. aacostZEri 
Toed PeH. Uott 7*4319 234 — -J 


ialal » 


although call money was fairly policies were unchanged at the 
volatile in Amsterdam, falling regular central bank council 
to 5} per cent from 7} per cent meeting 

WEEKLY CHANGE IN WORLD INTEREST RATES 


Btec rattan? M aia gar* 

3&/38 New Broad Si, ECZMUUJ. 01-638 **» 
Dtac.iae.Jab3 B6M 2874 +U3| 4Jfc 




HHi 


p ilar Unit That fang 
53, pat UK London. SW.5JH. 


Ltd. 

01-930 ZU? 


18 


LONDON 

Base rate* 

7 day Interbank 
3 mth Interbank 
Treaaury BUI Tandor 
Band 1 Bills 
Band 8 Bills ■ 

Band 3 Bins 
3 Mth. Treasury Bills 
1 Mth. Bank Bills 
3 Mth. Bank Bills 


!i2*s 

lSSfl-13 


184313 

185s 

il8>3 

1226 

,12*4-12;* 

121} 

ISA 


TOKYO 

One month Bills 
Three month Bills 


[7.34375 

748125 


BANK OP ENGLAND TREASURY BILL TENDER 


change, 

J NEW YORK 

'Uneh’di Prime rates 
.— i!s i Federal funds 

— i* 3 mth Treasury BUM 

'-0JI3U 5 Mth. Treasury Bills 
iUnch'd 3Mth.cn 
FRANKFURT 
uneh-S Lombard 

° One Mth. Interbank 

•Unch-d Throa monUl 

. PARIS 

- , . Intervention Rate 

Uneh d j Mth. Interbank 
Unch 0. Three month 


mat 


E. F. Winchester Fond MngL Ltd. 

44. Btaomdaay Sale, WC1A28A <H-623»?3 


Ueytit Bk. Un« Ttt. t* *«. U* « 

j’g* ****' 5 * 8 ' 04444591** 

@g=ite *13 a 


\ f' rJ-Vlh*. , r - ! !:*®i S' 

2u ;,-«Jk*Cav ™ 

Rowan t«»U TVuU 

cut ww *2; F1 * B r7 n 5« 

Brito'S 


nw>iw 


rassss* a=iss 


Extra Incan* 
BlMhsl) 


:l6ia 

jl4l<-13 

12.55 

1246 

1545 


Uneh'd 

Uneh’d 

-0.49 

-044 

-045 


Aawa aSpw.S a.j 

Sees. Of Asanca 


Uneh’d 
^0.25 
+ 0.10 


after CaS Ftf. . 
ISnW.CtfiRl 


MfLWiACWit-l 


equity & Law Un. T>. M. (a) (b) (e) 
/ur*nftam»l. WteWyccctie. 0494353T7 

UKGwlh.TVn.Ate 

Gwth.Tg.lqc. 

■SSsSk szm ^ 

NtiVA<Ten» l«^)CC. -oi 107 

bj»h-.^-s 8 is 


Og.lAnail 
Pacific Bran 
Oo MttUS). . 
Snell Cos. A n*y 

Da iteoxni — £-—■ 
tei n Cud- 
Oo. t Acm-i 


S7.N -Ufi 

is* 


nv 1 

BaSaw.-fi* 


«*J -Q* 


Bills on offer. £100 m 

Total of 


July 2 | June 25 

ElQOm j £100m 


July 2 | June 25 


BRUSSELS 
One month 
Three month 


applications l £*rz.73&m 

Total allocated £100m 

■ Minimum 

accepted bid £86.95 

j Allotment at 

minimum level... 76% 


£lOOm [Top accepted 

rate of discount 
1380.8m Average 
£ 100 m rate of discount 

Average yield 

£96.24 [Amount on offer 
| at next tender.- 
Rn* I 


12.233 6X 1&J73BX 


AMSTERDAM 
One month 
Three month 


| MILAN 
| One month 
Three month 
I DUBLIN 
I One month 
Three month 


Uneh’d 
Unch’ d 



Fidelity I n ternat io nal Mana g em en t lid. 
2(LAM«BCfaLaBalJMdMEC4N7AI_ 283 W1 
ARrte(z) E ffi.? 


.Uneh’d 

;~l« 


62.LendMWd.EC2R7K 

Mnoa U.T 164.4 6 

Aatsdw usncfent. Co. 
X NaUe SL. EC2V7JA. 


air 4 33 


ADcrtaUL— 

An. Spec, Sib. lz>. 

Growth & inGomr 

JteanTnatUI 

Ma*.loc.Ea.Trt._ 
Special 5M-_ 


m & 


BSSS*- 8 ^ 

Local AuthorfUes’ Mutual Imm*. JW-* 
77_lmixi WNL ECZN1DB. 0I-53BIM3 

M & G Group (yXcKd 


c_« a Pi e a p w GrwM 

4 Grtai 3. McVem. iooOt* COFMF 

gzgrjhffsfif&x.mi- 

Sftf t*"* 9mm . '44 * 


18JI313X 18 J 6 B 6 S 


Lowdoc band 1 WHs WtOfS to op to 1* dey*. bend 2 bMe 15 to 33 days, and 
band 3 Mis 34 to 63 days. Rates quoted mpraasnt Bsok of Eogteod buying or 
a a lKc g rates wWt tee money market. In other centres rates ore generaOy deposit 
rates in tee domestio atooe y marfcaq sod their .i ta apec th m changes dudag tee 
week. *Bend4T2»*. 


■jt. Mgnt Ltd 
l^VVWesat* St, London. El 7W>. 01^478827 

Wider Gate Fd. bx_[S.7 1 Zb 

37. Qgeea St, Lcodea EC4R 1BY. 01-2365281 


janes Rntay Unit Tnaf MugL Ltd. 
lb-14. West MU* Sued. Gtwoow. 041-2041^ 

=H5 a= ffi 

m 1 

Prketm Ane » H«t dMag j#7. 


fSBrr-- -33* 

SMB*" -Isi’ 


lAccom. Untell 
AreencsniWd 
ifletan. iWtaH 


FT LONDON 
INTERBANK FIXING 


LONDON MONEY RATES 


| Sterling l Local (Local Auth-I 

July 2 Certificate Interbank ; Authority negotiable 
1962 i of deposit i deposits bonds I 


Finance | Discount I I Eligible • Fine 

House com party Market Treasury , Bank . Trade 
Deposits Deposits Deposits 8 IUs $ } Bills# Blits# 


niWfcW fa htoian -i 
(tfSvKttSdweD -IF 


3 months U.S. dollars 


bid 15 16/IB 

offer 161)18 

6 months U8. do/larm 

bid 16 8)18 

Offer 166/16 


Overnight- 1 — 

2 days notice-. — 

7 days or — 

7 days notice... — 

One month 13-12$ 

Two months....; 13-12K 
Three months. 15-12$ 

Six month* 12i£-12ft 

Nine months... 12&-12{| 

One year ! 12^-12H j 

Two years. [ — | 


126s- 183* 
1266-123* 


IS j 12-1256 — 


1266-13 
1278-13* 
12tS-1S* 
12$ 13* 
13-13 1$ 
13131s 
13-131* 


13ls-13l* 
1312-13 U 
1338-131* 
12Ic-12I* 
133a -131* 
131 B -127a 


131*- 13 1 * 1218 - 126 * - | — — 

ISM 12 l*- 128 s 12 i*- 12 ^ 1245 13* 

11314 . 133 * 12i*-123* 12 aa- 12 i 412 fe- 12 £ IStV 

il3U-133* 12l4-123f 1214-12* 12, V 13 

- - 12IS-12*’ 12*4 


Kdi treexn* — 

(itoxrciaOon). 


FramDngtoo Uoft MgL Ltd- (a) 
frLLondteVMLEC2M5NQ. 01-6285im 

Anar. A Gen. B7A S 2 

(Actum. UnKs)—— gi 

An- Tirounri — 87i«J -Qi Xg 

S=8S ® 

lAccun. Dote) S-2 “x-i S’S 

Elam broms Treat— &JZ joM -0.« 


Conpowd^L- 
ConwrUoa Gramh 

comeraen laoonr 
Dndmd . H 
tACd L)nfB)| 


(Slj'JtWtthcfc** 

H^YWd 

Ckrasmiadoa}, 


IdL Growth FtL . 
(Acorn UnHsi— 


Uccorxrfadoa). 




The fixing rates (July 2) are the erith- 
, met leal mesas, rounded to ths nearest 
i on e eb tt e entli. of tbe bid and offered 
i rates for SlOca quoted by tee meiket la 
five reference beaks et 11 am each 
working day. Tbe bsnke am National 
Wastadneter Beak, Bank of Tokyo. 
■ Deutsche Bank, Benque Nstkmaf da 
Peris end Morgan Guaranty Trust, 


Local authorities and finance houses seven days’ notice, ythers seven days fixed. Long-term local authority mortgage 
rates, nonuneHy three years 13L pqr cenc lour years 13% per cenu five years 13% per cent. ® Bank bill rates m table 
are buying rates for prime paper. Buying rates for four-month bank ftKJs I2 u n-l2 7 i* per cent: four months trade 
Mls 13 per cent. 

Approximate asking rate for one month Treasury bills 12 J, J *-12 per cent; two months per sent: three 

months 12*it-l7Si per cent. Approximate a aking rate for one month bank Mis 124 per cent: two months 12“j2-l24 
per cent and three months I2I-12V, per cent: one monte trade btUs 134* per cent: two months TZ“i» per cenc 
three months 12V per cent. 

Finance Houses B a s e Rate* (published by the Finance Houses Association) IS 1 ! per cent from July 1 1982. London 
and Scottish Clearing Bank Ritas for landing 124 per cent. London Clearing Bank Deposit Rates lor sums at ssven 
days’ notion 94 per cent. Treasury Bills: ‘Average tender rates of discount 12-2313 per cent. Certificates of Tax 
Deposit (Sense 6 ) 134 per cent from June 30. Deposits withdrawn for cash 11 per cam. 


317, HWi Hobcnv WC1V7NL 01-8316233 

Areh—r Fbnrt.. ■ .DM b HB*bd I 73B 

Hr L n«> teLdv Jdr& 
Ar k wr ig ht Ma n a gem e n t 
Passage Gds,lfanteatar 0&UB42332. 

fctamtiaFejme»_IlS».4 V&.3) 5 439 

Bandays (Mearn LtrLOXcXa) 

Uniooni HO. 2S2. Rooted R*,E7. 01-3345544 


Robert Fraser Trust MgL Ltd. ^ 
28bABweri(St,WX „ 

RobL Fraser Ul To. |66J 70.4 — J 


Friends Pm. Thist Managers (*HbKO 
PWswiEnA Dorides- . Tel.8ffitB5 




Funds m Court* 
MfieTVistee, KngsHMV.WC2. 



CQ-f£ 6 «ai 
-I d £«5 


Unw G*mte y 9 * 

tecraate| bra— Fitei 

■srifSTS-lrtui 

Hhin iywn - - {J £ 


Rse-rr-Bia 


fEte— V 

ui--- 1 

ssssrr. — i 


£1*119 

mm 

as 


FMK4 . 
NawlKMkW ■*’ 




MBiteauu* 


MiAud 

(AmmUne) 

Rrcovery..—. 

lACCum. Uoatsl 

Scccnd C«wrtt. 
(Jkccum. Ums)_ 
Sm>arr CDnpmWs 
tAcoxn. UnttD— . 


-OJ 4fj 


-OJ 4M 

3J ® 

— O 1 4*1 

-03 *73 


scornn »} 

Sl-WWTM . — is f 

soiowra; IWte 

Schroder Unit Trttft i 
tg,g,lbreBlMW 2 . 

i*Swn ,Uf«u 08 ] 

locuirFxt 

IW> lltej wj 

Ere .. . i — UfiJ 

lAroin 16»W H§y 

r^rrar -jfl* 

ilcnoi ipaUi - mJ4 

SM9lwCa.’4 (U4fl 

lAcasA Untti) |c*M 


01-4054300 


EURO-CURRENCY INTEREST RATES (Market closing Rates) 


Sterling 


Canadian I Dutch 
Dollar ! Guilder 


Belgian Franc 
Gonv. Fin. 


Tfr 

C-X- 

I 


Shortterm 126 *-lfis 4 

7 day's notice....! 124 -127* 

Month 127*.13 

Three months. 13-131* 

six months | iai*-i3u 

One Year. 13l*-13i* 


■ 15-151* 14 4-151* 813-864 

15 ia-153* 154-161* 84 8 S, 

1538-155* 16ls-16S* SfJ 

LSU-tSV, l 17iV-17ra 81* 8 U 

161*163* 17ft-17ii 64-83* 

IBTg.iei* ; 173*-176* 8 A- 8 A 


11*44 

24-3 

4l*4U 

44*^47* 


15-164 
15-151* 
15I*-1S3* 
161*-164* 
174*-18 
185* 183* 


18-20 

194-211* 

20*4-2114 

am - 22 
22 - 221 * 
22i*-231b 


14l*-15l* 

15l*-16l* 

16-17 

16-17 


j 141* >15 1 

I 14i*-15i4 . 
I 15ra-155* ! 
1 151*- 163* 1 
I 151*-153* ; 


16U-164* ; 153*. 155b 1 


: 12 -lSis 
131*-144* 
1 1658-171* 
‘ 1617l S 

I 17l*-l855 
< 171*- 1 91* 


SDR fmked deposits: one month 12V-13V per cent: three months T3*i*-13V* per cone eix months 13V13 7 . per cent: d»e year 13V13V per cent. 

ECU linked deposits: one monte 12V- 12V per cent: three months 12 1 h*- 1 Z I *ii per cenc six months per cent: one year 13V-13V per cent. 

Asian S (dosing rates m Stngapors): one month 1 5*1* -15V per cent; three months IS^V-IS 15 !* per cem: six months 16V16 1 * per cent: on a ye»r ■ IS 11 * -16V 
per cent. Long-term Eurodollar two years 15V IB 1 , par cent: three years 15 7 a-16 1 a par cenc four yaera TS 7 »-1 6H per cenc five years 15V16 3 ! per cenc notP'naJ 
ctoa'mg rates. Short-term rate* are caH for U.S. dottors, CanacHan dollars end Japanese yen: others two days* notice. 

The following rates were quoted for London doMor certificates of deposit: one monte 15.15-15-25 per cam: teres months 15.60-15.70 par cent: six month* 
1S.75-15.85 per cent; one year 15.75-15.85 per com. 


Da Ana. 

DaC*ti 
Do pyfr np* 

Da Em Income 
Da financial 
Da 

Da$tttFM,M.lnc. 

Da Gu. RjoBcAic- 
Da Gte. Pacific lee. 

Da Growth Ja 

Da burnt Ttus — 

DaPrf.AVs.TsL_ 

DaR 
DaTi 

D 0 .VV . „ 
fftsUaFdAcc. 

Da Ui rnmr - 

Baring Brothers & C& Ltd. 

8 , BatewgKe, EC2N4AE. __ 

“J i! 

Measti - ay J»13ftr i B00aBeg. 
Stek&Smgt’liSaBSW H&. 015886280 


Grass Inc. Jbm 24_ 
Mte Yield June 20 


8 e# 

SBKXEd is ondcs under Court cssud. 


5S£- sss==Si m W 

ssaasS’sfea 


6.T. Unit Managers Ltd. 

16 Fktesy CirOA EC241 7BL 
C.T.Caa Income — ns&S 167. 


Inc. fit Un. 
■U S. & Gen I 
TTTwkLBcLFdl 
6 .T. Jmai & Geol 
G.T. Pens. Ex. Fd. 
G.T. IrX'LFtrtM 


Manulife Msna gemwd Ltd. 

SL Grate's W*7. „ 2B*SS 

asssst=iti sja^sa ss 


itoxrv Ubmj)- 21 
I A* ore Unssl »2 

Grits. filed- . — FJ 

lAxum Uwn: — - J}} 

Amtrawn It? 

>ta» 

Smomcvr A Make W 

ASSh* UMF 3g a 
*P 6 C>a ra{J ffif 
•feuKMV JW M _ JK* 


Mayflower Man a g s m swt Co. Ltd. 
SjS,SSwaaTraY7AU. 014068099 





G.T. IrX'Lfirt — 
(tT.Fo-Eas&G _ 
G.T. Tech. & GHl Fd. 
G.T. European Fund- 


G. & A. That te) (g) 

5Ray MteR ted.Brmreood 
G.&A WL3 


10277)227300 

4MHUt 


Gstmore Food 

2 St MBeyAae, EC3A88P 
Dealing enhr 01 


(aMg) 

01-6236114 


sss^sssr&m 

HSESS?r£fe‘ ifld IS 


idoMi I m» Mnpn LM.-- . 
U0»Vhwai9,ClMM 0HMM1 

Scottish CtedtkMo FTO4 
28 Si. tohwi 5o M*r# 

J : ; l « 

Scotthh WMowf rund 
p 0B«w 9Qi tJtotrate EMJ65WQM-M9M0C 
PwtftTti.Jaly2-.ln3 1024 


Mcncap Unit lYvst Mngrs Ltd (aKcXg) 
Uektsn Hsr. 252Ronted R& E7. 01534 »M 
Mearap W* SL5J - i U1 


28 S». Atevws So Ed Ww# 

JgKlSS:: '»* H I 


p ff »a 901 EtetenhEMttHU 
ParatftTtt.jHh2-.n33 Mt 


S8U&14»tttt 
1014 <4* -e 


CURRENCIES AND GOLD 


THE DOLLAR SPOT AND FORWARD 


Dollar declines 


Easier Eurodollar rates pushed 
the dollar down from its recent 
peaks in rather confused foreign 
exchange last week. Doubts about 
Federal Reserve monetary policy, 
following better money supply 
figures than expetced. and hopes 
of another small cut in last 
week's Ml figure, contributed to 
the uncertain conditions. By 
Friday trading became very 
quiet, ahead of the Independence 
Day holiday in the U.S. today. 

The dollar fell to DM 2.4760 
from DM 2.4S30, against the 
D-mark during the week: to 
FFr 6.8690 from FFr 6.8850; 
again st the French franc;' to 
Y256.45 from Y257.40 against the 
Japanese yen; and to SwFr 2.1035 
from SwFr 2.1170 in terms of the 
Swiss franc. 

During the week three-month 
Eurodollars fell to 15i£ per cent 
from 16 ic per cent and during 
the same period Eurosterling 
rate eased to 13ft per cent from 
13ft per cent. The dollar’s trade- 
weighted index, on Bank of 
England figures, declined to 121.0 
from 121.6, but sterling’s index 
was unchanged at 91.3. 


The pound rose to SL7315 from 
S1.7255, but showe d mixed 
changes against other currencies. 
It rose to DM 4.2875 from 
DM 4 .2850. and to FFr 11.89 from 
FFr 11.87. but eased to Y444 
from Y444J5, and fell to 
SwFr 3.6425 from SwFr 3.6550. 

There was some disappoint- 
ment on Thursday at the West 
German inflation for June, but 
the D-mark tended to gain sup- 
port from the agreement by the 
German Government on the 1983 
federal budget 

The Italian lira remained the 
strongest member of tbe Euro- 
pean Monetary System, followed 
by the French franc. Both cur- 
rencies have been quite firm 
after their devaluations last 
month. The D-mark and Dutch 
guilder were revalued at the 
same time, and were virtually 
level at the bottom of the system 
last week. 


UKt 1.7280-1.7400 1.7310-1.7320 0 -38-0.«3c dia 
Irelandt 1.3900-1.4010 1.3900-1.3920 0.60-0X5cpm 
Canada 1.2865-1.2900 1.2870-1.2880 0.12-0.15c dts 
Nate In d. 2.7200-2.7350 Z.7320-2.7350 1.60-1 -50c pm 
Belgium 47.05-4733 47-31-47-33 2-4C dia 


Denmark 8-5130-8.5500 8.5450-8.5500 0.90-0.65ora pm 


W. Gar. 2-4660-2.4800 2.4755-24765 

Portugal 83.40-84.00 83-80-84.00 

Spain 111. 20-111 j5Q 111.25-111.35 

Italy 1.383V1.391 1.3S7V1.388* 


2.4755-2-4765 1.40-1 -35pf pm 
83-80-84.00 30.130c di s 

111 .25-111 .35 75-8Sc dis 
1.337V1.388H 6-64. lire dis 


6.3050-6.3250 6.3050-6.3100 O.3O-O.70ora dis -0.95 1 . 20 - 1 . 80 dis -0.89 


6.8175-6.8715 6.8665-6.8715 0.25 -0.05c pm 


Sweden 6.1020-6.1300 6.1430-5.1160 0-60-0-30ora pm 


Bn 254.80-25680 25680-25680 1-92-1.84y pm 8 JO 5.62-5 J2 pm 

itria 17.31-17.41 *2 17-40*1-17.4112 11 VIOgro pm 7.33 33V30 *i pm 

tz. 2.0900-2.1060 2.1030-2.1040 1^8-1. 90c pm 11.07 5.70-5.82 pm ‘ 

t UK and Ireland ace quoted In U.S. currency, forward premiums *nd 
discounts apply to the U.S. dollar and not to tea individual currency. 


THE POUND SPOT AND FORWARD 


U.S. 1.7290-1.740 
Canada 2JZ75-2J37 
Notelnd. 4.71V4.74>» 
Belgium 81J0-82J0 
Denmark 14.76-1483 


Gold rose SS to $313 in quiet 
trading. It touched a low of 
8302 on Monday, but then 
showed a slightly firmer trend 
overall, rising to a peak of $318} 
on Wednesday. 


GOLD MARKETS 


Gold Bullion (fine ounce) 

Close j 53121 * -5131* (£iaoi*-181) S310i*-311i* 

Opening- [8513i3-314i s (JCiao ieOk) 631Si|-314t* 

Morning fixing.... ,83 13 (£130.351) S311.75 

Afternoon flxing.lS312.76 (£180818) 631089 


Krugrnd *32 Uv 3221- 
la Krug SJ6Si]-166it 
l* Krug S84 la-85 
1(10 Krug 834 ta-351" 
Maple leaf 8321^4-3221* 
New sov 674M-74J* 


ft- 



































































































































Uv. 
No*. 
May 
Mar. 
Feb. 
Feb. 
Ajr. 

aiu|£ 


A FINANCIAL TIMES MANAGEMENT REPORT 

Consolidated Accounts in Europe 

The E.E.C. Seventh Directive on Consolidated -Accounts is so vital that finance 
directors and accountants should start thinking about it now. It will affect all 
limited companies within the E.E.C that arc members of groups. 

CONSOLIDATED ACCOUNTS IN EUROPE, by international accounting firm 
Ernst & Whinney, will help you prepare to meet Ihe requirements of the 
Seventh Directive. 

It reveals the likely impact of The Seventh Directive 

si: It places the directive in perspective by analysing current law and practice 

+ It warns you in advance of the likely requirements 

# It informs you of what major companies think are the difficult areas 

It provides a case study to demonstrate in a practical way the problems of 
producing consolidated accounts 


Please return to: Marketing Dept. The Financial Times Business Information Ltd. 
Bracken House. 10 Cannon 5ireet. London EC4P 4BY. 

Please send me copy/copiesof Consolidated Accounts in Europe at 

£48 (UK) or S 142 (outside UK). 

I enclose cheque value £/USS made payable to Business Information. 

BLOCK CAPITALS F LEASE 

Name 

Company 

Address — . . _ 


Signature Date 

Regained cilice The Financial Timci Business Inlormalion Lid. 

Bracken Kouk 10 Cannon Street London EC4P4BY Peewrrcd m England No ME25I 





















A pH 
Feb. 

Jan. 

May w. 
Aug. Feb. 











U , 
dU { S. 

:« s 

Qlfe ♦ 

* 02 I 1 

3.W 
10 
SJ> 






































































































































































































































































































































































































Trollope & colls 

MANAGEMENT 1333 


SI 


TOTAL BUILDING SEKVKE 
5r?PysartSlieefcIxmdbnEC2A?fflc 
Tefephcme ;013772500 


FINANCIAL TIMES 



Monday July 5 1982 


Property Investment,; 
Development and 
Construction 


Rush &Tompkins 

01-3003388 


Political storm looms over Nissan 


BY KENNETH GOODING IN LONDON AND RICHARD HANSON IN TOKYO 


A POLITICAL row in Britain, 
expected this week followin'* 

j? at Nissan « 

““JS™ car maker, almost 
«***«!! its pro- 

ff^kL 2 ?^ 000 a year «“■ Plant 
in toe uK. 

Some MPs blamed Industry 
Department -officials for the 7 
breakdown in talks with Nissan. 
They say the officials, influenced - 
by heavy lobbying by the UK 
motor. components industry, dis- 
couraged the Japanese group by 
insisting that a very high level 
of local (that is. European), 
components be used. 

Nissan’s decision was reported 

by Asa hi Shim bum. the influen- 
tial Japanese daily newspaper. 

It quoted Mr Takashi Ish’ihara, 
Nissan's president, as saying: 
"There is a strong opinion 
within our company that the 
project is very risky. We can- 


not force ourselves to go ahead 
when there is no company 
consensus." . 

A senior- Nissan executive will 
travel to London later this 
month to tell the UK Govern- 
ment about his company's deci- 
sion, the report added. 

The possibility that Nissan 
might set up the plant was an- 
nounced in a blaze of publicity 
in January last year. It prom- 
ised to be a triumph for 
Government attempts to. attract 
more investment in Britain by 
foreign companies. 

Mr Norman Tebbit. then 
Minister of State at the Depart- 
ment of Industry, said it would 
he much better for “the British 
to buy Japanese cars built in 
Britain than, cars imported from 
the Continent." Nissan would 
give the UK motor industry a 


shot . in the arm by injecting 
Japanese production knowhow. 

However, the UK motor 
industry said- it would .be 
weakened' if Nissan was per- 
mitted to build engines and cars 
in Britain mainly from kit and 
low-cost components imported 
from Japan. 

A Ford paper estimated that 
UK-based car makers would be 
forced to source some of their 
components from Japan and 
there could be a net loss of 
30.000 jobs in the UK com- 
ponents sector. 

Nissan promised to give its 
decision within six months, but 
delayed again and again as its 
feasibility studies showed the 
project might be only margin- 
ally viable if the group stuck to 
its initial undertaking that the 
European component content of 
its cars would start at 60 per 


cent and rise to SO per cent as 
quickly as possible. 

Other ■ factors which in- 
fluenced the decision included: 

Nissan has been forced to in- 
crease its stake in Motor Iberica 
of Spain to a majority holding 
of 54 per cent The initial plan 
is for Iberica to produce com- 
mercial vehicles but this could 
be expanded to include cars 
after Spain joins the EEC. 

There are growing signs that 
Europeans' love affair with 
Japanese cars is waning. Euro- 
peans have found that Japanese 
vehicles have similar faults to 
the local product. 

It is clear that car demand 
in Europe will rise only a little 
over 1 per cent a year for the 
foreseeable future, and there is 
too -much capacity. 

The Europeans have 


improved labour productivity 
considerably in the face 
Japanese price competition. 

Anti-Japanese protectionism 
in Europe has not been 
alleviated greatly by the pub- 
licity given to the proposed 
British project. 

- Peter Riddell, Political 
Editor, adds: At Westminster 

ministers will be criticised . 
Labour MPs for raising hopes 
excessively high when Nissan 
initial interest in investing i 
Britain was announced. MPs i 
areas of high unemployment 
are likely to be especially 
bitter, although among those 
motor industry constituencies 
there may be some relief at the 
absence of a further threar 
to BL. 

Austin Rover seeks cuts price 
parts. Page 6 


Isle of Man 
seeks advice 
on banking 
structure 

By Anthony Moreton, 

Regional Affairs Editor 

THE ISLE OF MAN Govern- 
ment has asked the Bank of 
England to review the structure 
of its banking system foliowing 
the collapse of two small banks 
over the past 10 months. 

Dr Edgar Mann, the island 
Finance Board chairman, said: 
“We are seeking advice on the 
highest level on the structure 
of our hanking system. We 
approached the Bank of 
England because if it is found 
that we need tn change our 
system of control we must get 
advice from the people best 
qualified to give it." 

The Bank is believed to be 
willing to co-operate with the 
Isle of Man and a small team of 
officials is expected to arrive in 
Douglas shortly. It will pay 
particular attention to the way 
the island exercises control over 
its banks. 

The Isle of Man's Crown 
dependency status means it can 
legislate for itself on all 
matters other than foreign 
affairs and defence. One of the 
ways in which it has moved has 
been to set up an offshore 
finance centre, more popularly 
called a tax haven. Income tax 
on the island is at a fixed 20p 
in the pound and there are no 
capital taxes of any sort. 

This has led to a number of 
wealthy people emigrating to 
the island, including Mr Robert 
Sangsler, the race horse owner 
who won the Derby this year 
with Golden Fleece, and Mr 
Richard Adams, author of 
Watership Down. 

The island is. however, part 
of the sterling area and so has 
close links with ihe Bank. 

Financial control is exercised 
by its treasury. Dr Mann, the 
island's equivalent of rhe 
Chancellor of the Exchequer, 
said that one of the matters to 
be discussed with the Bank was 
whether the island should have 
its own central hank. 

“We are definitely missing 
ihe presence of a central bank. 
We do have an Isle of Man 
Bank, but rhai is a subsidiary 
of National Westminster and 
acts as a clearing bank." 

“The problem is that when 
we in government want to seek 
assistance we have nowhere to 
go on the island." 

The island’s problems sur- 
faced last autumn with the 
collapse of International 
Finance and Trust Corporation, 
a small merchant bank. 

On June 23 the island with- 
drew the licence to operate 
from Savincs* and Investment 
Bank following High Court 
actions. 

One step mooted recently in 
Douglas has been the appoint- j 
ment of a hanking inspector who 
would spend his time solely 
with the banks. There has been 
political opposition in this move 
because the salary involved 
would he nut of line with those 
m the Manx civil service. 


Unions agree cash plan for Labour 


BY ELINOR GOODMAN, POLITICAL CORRESPONDENT 


THE TRADE UNIONS agreed 
yesterday to provide the Labour 
Party with the financial means 
to fight the next election. 

In return Labour’s politicians 
are expected to show. the neces- 
sary political will to win the 
election by uniting behind the 
leadership of Mr Michael Foot 
and to behave in future as an 
alternative party of government. 

At a meeting yesterday be- 
tween leaders of Labour and of 
the unions belonging to Trades 
Unions for a Labour Victory the 
unions agreed to set up a 
General Election fund for the 
Labour Party with a target of 
£2m to £2Bm by 19S3. 

The aim is to raise £lm by 
the end of this year in case of 
an early General Election, a pos- 
sibility discussed with some 
alarm yesterday. 

The representatives agreed to 
ask member-unions to raise 
affiliation fees to the Labour 
Party from 45p a head to 50p. 

This should raise about 
£300,000 and help reduce the 


Labour Party overdraft, which 
is expected to be £500.000 by the 
New Year. 

The two sides will examine 
ways of improving management 
of Labour's finances in future.. 

The agreement is funda- 
mental to Labour Party hopes 
of winning the election, and was 
presented yesterday as part of a 
new drive for unity in the party. 

No precise strings were at- 
tached to the agreement, hut 
implicit throughout yesterday's 
meeting was the unions’ view 
that the party would not de- 
serve financial support unless 
it put its own bouse in order. 

This means that the party 
will be expected to unite be- 
hind Mr Foot and that there 
should he - no repeat of last 
year's deputy leadership con- 
test. 

The moves against the Trot- 
skyist Militant Tendency will go 
ahead, but as part of the spirit 
of unity the Right may have to 
accept some policy decisions it 
would like to reverse. 


Later Mr David Barnett, chair- 
man of Trade Unions for a 
Labour Victory and general 
secretary of the General and 
Municipal Workers’. Union, said 
that .rhe.. significance of the 
meeting was the commitment to 
uniting behind the leadership to 
win the election. 

The unions, he said, had pro- 
vided the “ sinews ” far Labour 
to win. 

The agrement would involve 
an economy drive at Labour’s 
headquarters in Walworth 
Road. Mr Basnett made clear 
later that the unions would have 
to tighten their belts to find 
the money for the party, and 
that under these circumstances 
they expected similar sacrifices 
by the party. 

The unions have long been 
Labour's paymasters. But 
yesterday's meeting was highly 
significant for the way it demon- 
strated that .despite the emer- 
gence of the SDP, and the 
Labour Party’s poor standing 


with the electorate, the unions 
still regarded the party as the 
best vehicle for their political 
aspirations. 

At the meeting union leaders 
made it dear that they were 
desperately worried about the 
prospects of the Tories winning 
the election, and thought it 
essential to the interest of their 
members' that the Labour Party 
started concentrating on put 
ting its polictes over to the 
electorate, rather than feuding 
in public. 

Mr Fo.ot said it was ‘‘an ex- 
tremely good meeting “ and that 
the decisions would make it 
possible for Labour to win. 

Leaders of almost all the big 
trade unions were at the meet- 
ings, together with leading mem- 
bers of Labour’s executive. 
Despite the dependence of the 
Labour Party on the unions for 
funds, the far Left is very 
hostile to Trades Unions for a 
Labour Victory, and Mr Tony 
Benn left the meeting hastily 
without speaking to reporters. 


Roy J enkins to quit Morgan Grenfell post 


BY PETER RIDDELL, POLITICAL EDITOR 


MR ROY JENKINS intends to 
resign as a director of Morgan 
Grenfell. ■ the merchant bank, 
following his election on Friday 
as leader of the Social Demo- 
cratic Party. 

He sadd at the weekend that 
he did not think it appropriate 
for a leader of a political party 
to have outside interests and 
indicated that in recent months, 
from the Billhead by-election 
onward, the bank had taken up 
less of -his time. 

Mr Jenkins is believed to have 
been paid less than £10.000 a 
year for his part-time director- 
ship of Morgan Grenfell Hold- 
ings. He hads the services of 
a chauffeur-driven car. 


He stilL receives £30,000 a 
year until the end of 1983 as a 
farewell payment from the EEC 
Commission after his terra as 
President though this may now 
be adjusted for his salary as MP. 

His appointment in early 1981 
to the bank's board caused 
controversy in view of has EEC 
payment 

He clearly now wants to avoid 
any such criticism. 

Mr Jenkins had a preliminary 
meeting over the weekend with 
Mr David Steel, the Liberal 
leader, to discuss the main 
issues facing the Alliance. . 

Their main priorities are to 
start preparations for a joint 
campaign for the next General 


Election, and rapid completion 
of talks on the shareout of 
Parliamentary seats and on 
selection of candidates: 

Both leaders face some prob- 
lems Inside their own parties 
about attitudes toward the 
Alliance. 

Mr Steel's need to win over 
his rank-and-file at the Liberal 
Assembly in late September 
may affect the timing of the 
choice of the Prime Minister 
candidate on behalf of the 
Alliance, still likely to be Mr 
Jenkins. 

There are also delicate 
issues about the extent to 
which there should he a joint 
manifesto- at the election; 


whether there should be joint 
spokesmen in the Commons: 
and about fund-raising 

Mr Jenkins faces a difficult 
personal challenge in re- 
establishing his authority in the 
Commons, where in the three 
months since his return after 
the HiHhead by-election be has 
been overshadowed by Dr David 
Owen, the parliamentary leader 
until now. 

All the signs, are that Mr 
Jenkins intends to leave until 
the autumn decisions about the 
responsibilities of" the other 
members of the Gang of Four 
(Dr Owen, Mrs Shirley Williams 
and Mr William Rodgers). 

Editorial comment Page 12 


Howe opens debate on manifesto 


BY PETER RIDDELL, POLITICAL EDITOR 


A SHIFT to private enterprise 
for mtny of the activities now 
within the public sector should 
form the core of the Conser- 
vative Party programme at the 
general election and in the next 
Parliament, Sir Geoffrey Howe. 
Chancellor, said at the week- 
end. 

In a Cambridge lecture. Sir 
Geoffrey nought to set the terms 
of the debate now beginning m 
the Tory Party about the next 
election manifesto. Senior 
ministers are now much more 
confident that the Tories will 
win the next election, and they 
therefore believe that attention 
should shift ahead, especially as 
many of the detailed legislative 
pledges of the 1979 manifesto 
have been fulfilled. 

Sir Geoffrey, who sees himself 
as a major influence on the 
redirection of Conservative 
thinking over the last few years, 
placed stress on widening 


choice and ownership, de- 
regulation and making markets 
work. 

His emphasis on what has 
become known as privatisation 
is in line with the views of 
many of the ministers promoted 
by Mrs Thatcher in the last 
couple of years. 

Sir Geoffrey also highlighted 
reform of the labour market as 
a means of tackling the root 
causes of unemployment. 

His suggestions on loosening 
“ the grip of the public sector " 
covered industrial policy, local 
government and the social ser- 
vices. Among ihe ideas put for 
consideration were: — 

• Increased market influences, 
and some private ownership, of 
public utilities. 

• Some local authority services 
should be transferred to private 
enterprise. 

• Increased use of charges and 
some private sector involve- 


ment in social services. 

• More consumer choice in the 
NHS and faster growth of pri- 
vate health insurance. 

• Encouragement .of role of 
voluntary effort in personal 
social services. 

• Wider choice in education, 
possibly through a voucher 
system whereby parents would 
have a greater selection of 
schools for their children, 
student loans and more com- 
munity involvement in financing 
and management of local 
schools. 

Many of these ideas are likely 
to be strongly criticised, not 
only by other political parties 
but also by many in the 
industries and services affected. 
But they are generally in tune 
with Mrs Thatcher's prefer- 
ences. 

Growth forecasts. Page 6; 

Inflation still the enemy. 
Page 13 


Guinness Peat in £llm commodity sale 


Weather 


UK TODAY 
SUNNY intervals but showers 
in North. 

E. England, Midlands and N. 
Ireland ' 

Mainly dry with su nny 
periods. Max 20C (68F). 
W. England, S.W. Scotland and 
Wales 

Mainly dry but light showers. 
Max 19C (66F>. 

E. and N.W. Scotland 
Cloudy with showers, especi- 
ally early, some heavy. Max 
17C <63F). 

Outlook: Rain with some sun- 
shine. 


WORLDWIDE 


BY ALAN FRIEDMAN 

CONTROL OF the commodity 
business of Guinness Peat, the 
troubled group which disclosed 
on Friday a £15m loss provision, 
is being sold to a group of 
managers and investors, led by 
Lord Kiss in. in a deal worth 
film, of which £6m is to be 
paid in cash. 

Guinness Peat will exchange 
about £3m of the Lewis and 
Peat commodity group's assets 
for redeemable preference 
shares, and will hold an initial 
equity slake of 15 per cent, to 
rise to just less than 20 per 
cent, in the commodity business. 

Redemption of the prefer- 
ence sharps will begin after 
about three years. Guinness 
Peat, meanwhile, through its 
ordinary and preference share- 
holdings. will hp entitled to 
receive up ;n 37 per cent or 
commodity profits. 


The group led by Lord Kissin 
— which Includes the managers 
Sir Harry Phillips. Mr David 
Burt, Mr Ron Watts, Mr Ron 
Cowing, Mr Dennis Cowley, Mr 
Robert Kissin and Mr John 
Wheeler— will take over about 
£40m of the trading debt bound 
up in the commodity -business. 
This in turn should reduce the 
Guinness Peat group’s outstand- 
ing debt from about £90m it is 
now. 

Lord Kissin. who will be 
chairman of the commodity 
business, said yesterday he ex- 
pected Guinness Peat to issue 
notice of an extraordinary meet- 
ing of shareholders within a 
fortnight, in ' order to seek 
approval of the deal. He 
stressed that, in spite of the 
disagreements of the past few 
months, he would support the 


Guinness Peat board. "I am 
sorry that I was right about 
the board's mistakes (in recent 
years), but I will support the 
future management of the 
company." 

Lord Kissin. who remains life- 
president of the group, said his 
past disagreements with the 
board of Guinness Peat had 
been over “ issues where the 
board took decisions and did not 
have complete information." Re- 
ferring to Mr Edmund Dell, .the 
former Trade Secretary in a 
Labour administration, who is 
chairman of Guinness Peat, 
Lord Kissin commented: "Hav- 
ing gone through this traumatic 
experience, I think Mr Dell is 
now a constructive influence.” 

Mr Dell yesterday acknow- 
ledged " ultimate responsibi- 
lity" For the dealings with 
Performance Tire, rhe Los 


Angeles company which im- 
ported tyres into the U.S. and 
was financed by a Guinness 
Peat subsidiary in the UK It 
was because of Guinness Peat’s 
difficulty in recovering funds 
from Performance Tire that the 
£15m loss provision was. made 
on Friday. 

Mr Dell said he had no inten- 
tion to resign, although he had 
to acknowledge responsibility, 
as chairman. 

. . Trading in Guinness Peat 
shares is to begin again today, 
having been suspended at 57p 
on Thursday at the company’s 
request. It is believed that a 
large block of shares changed 
hands on Wednesday evening, 
but Mr Alastair Morton, chief 
executive, said on Friday he was 
unaware of whether the Stock 
Exchange would conduct an 
investigation. 




Y’day 



Yday 



midday 



midday 



•c 

•F 



•c 

•F 

Ajaccio 

s 

2fl 

79 

L. Ang.t 


— 

— 

Algiers 


— 

■ — 

Luxmbg. 

F 

17 

63 

A/nsdm. 

F 

17 

63 

Luxor 

S 

3S 

95 

Athens 

S 

27 

81 

Madrid 

S 

29 

84 

Bahrain 


— 

■ — . 

Majorca 

s 

32 

90 

Barclna. 

S 

27 

si 

Malaga 

F 

20 

68 

Beirut • 


— 

— 

Malta 

S 

32 

90 

Ballast 

c 

14 

57 

M'chatr 

c 

17 

63 

Bnlgrd. 

s 

33 

91 

MeJbno. 

F 

11 

52 

Berlin 

F 

19 

G6 

M*. C.t 


— . 


Biarritz 

C 

21 

70 

Miamif 

S 

26 

79 

Bmghm. 

R 

1G 

61 

Milan 

5 

29 

84 

Blackpl, 

C 

17 

63 

Montrl.f- 

F 

13 

55 

Bordx 

s 

24 

75 

Moscow 

F 

18 

64 

Baulqn. 

c 

14 

57 

Munich 

F 

16 

61 

Bristol 

c 

15 

59 ! Nairobi 

C 

23 

73 

Brussels 

F 

17 

63 

Naples 

S 

29 

84 

Rudpst. 

T 

28 

82 

Nassau 


— 



Cairo 


S 30 86 


Nwcsti. C 17 63 


Niu 
Nicosia 
Oporto 
Oslo 
Paris 
P«rth 


Cardiff C 17 63 [N York t 5 19 BB 

Cas'b'ca P 21 70 :Nim C 21 15 

Capa T. S 17 83 
Chlcflt C IS 86 
Co logos F 19 68 
Cnnhgn. C 17 63 
Corfu S 29 84 
PoiWOrt C - 14 57 
Dublin R 16 61 

□brvnb. S 26 79 
Ednbgh. H 15 59 
Fare F 18 64 
Ftorotieo S* 30 86 
Frankft. F 21 '70, 

Funchal — — - 

Genova S 22 72 
-Gibhtr. F 21 70 
Gl'sg'w R 13 53 
G’msay C IS 66 

Helsinki C 18 64 

H. Kong fl 25 77 
Innsbrk. 6 -19 68 
liWmsi, C 16 01 

I. O. Man — — 

Istanbul S 27 81 
Jersey C 16 61 
Jo'buis S 12 54 
L Pirns. F 23 73 [Venice S 29 84 

Lisbon R 15 -59, Vienna C ]7 63 
Locarno S 28 82 .Warsaw T 18 64 

London C 18 #1 'Zurich F 18 64 
G— Cloudy. F_ Fair. Fg-^Fog. H— Hail. 

H— Rain. S — Sunny St— Sleet. 

Sn — Snow, T — Thunder., 
f Noon GMT temperatures. 


F 23 73 
F 19 66 
F 20 88 
C 16 59 
Prague F 16 61 
Ryfcjvk. S 12 54 
Rhodes S 27 81 
Rio J'of — — 
Rome S 30 86 
Salzbrq. C IB 66 
S’ cisco t S 13 55 
S. Mrhs. — — 
Singepr. F 29 84 
S'tiagot — — 
Stckhm. F 16 61 
5traabg. F 31 70 
Sydney C 15 59 
Tangier C 22- 72 
Tel Aviv S 37 81 
TeneriFe F 24 75 
Tokyo R 20 68 
TYniot C 15 59 
Tunis S 37 99 
Valencia F 27- 61 


THE LEX COLUMN 

CU tries to buck 





FEW leading British com- 
panies have attracted such con- 
troversy and suspicion as Com- 
mercial Union over the . past 
decade. In spite of the new 
management’s attempt to re- 
organise its structure and 
improve an image which was 
gravely impaired in the mid- 
1970s, the City remains deeply 
divided over the group’s pros- 
pects. 

To judge from the share price 
performance, the bearish line 
still predominated. CU has 
increased its dividend every 
year over. the past decade except 
in 1975, when the pay-out was 
maintained on a pre-tax loss 
of £-10.2m. If this suggests that 
the current year will produce 
a further increase, then the cur- 
rent historic, yield of 13 per 
cent on CU -equity, the highest 
in the insurance sector, must 
indicate serious misgivings 
about the group’s strategy. 

The success or failure of CU’s- 
recent change of direction, most, 
pronounced in' the U.S., will not 
be established for several 
years. So, even at the present 
share price level, investment in 
CU demands an act of faith in 
the quality' of; the group's 
management. 

The company has, however, 
acquired its' disciples. One of 
them, Laing' and Crulckshank. 
has just - completed a study 
entitled ** The New Commercial 
Union ’’ which argues strongly. . 
if uncritically, in favour of the 
shares. The study supports 
CU's decision to concentrate its 
resources’ in ihe principal 
markets oF North America and 
Europe as a way of spreading 
risk through different lines 
while creating the maximum 
benefit from economies of scale. 

The heart of the study con- 
cerns CU's U.S. strategy and 
the damaging mythology which 
L & C believes has grown up 
around it. The U.S. is far and 
away CU’s most important 
market. Last year it accounted 
for 47 per * cent of non-life 
premium income and 65 per 
cent of the group’s underwrit- 
ing loss. It is also the area of 
most rapid premium income 
growth — 23 per cent last year 
—and the focus of manage- 
ment’s attention. 

L . & C maintains that the 
$250m which the group has 
invested in. data processing and 
marketing over the past few 
years will enable it to increase 
its market penetration from a 
lower cost base and without 
any real deterioration in loss 
ratios. CU itself expects its 
expenses ratio to drop from, a 
current level of 33 per cent to 
under 30 per cent wiAin- the 
next few years, as the benefits 
of its computer system work 
through. - 

CU increased its share of the 
market last year from 1.2 to 
1.5 per cent, to a large degree 


' 130 

1 SHARE HWX PKIATW* 
■ TO FT-ACTIMII1ES - 
J| all- SHARE moex 


120 


110 

JR 



lu IV 1 


SO 

-MR r . . . 


80 

- 1 V ' . -.-i 


70 



60 



50 

-Commercial ^1’ 

" 

40 

Union “ 



i.i nim.iL 


- W "W2 . . 1977 ' 1982 J 


by strengthening its relation- 
ship with independent agents. 
According to L & C. the com- 
pany is attempting to arrest 
the inroads. which direct writers 
have made in the U.S. market 
while keeping tight control 
over underwriting risk. L & C 
believes there is little evidence 
that delegation of the under- 
writing pen has damaged CU’s 
performance. Indeed, CU . has 
improved its loss ratios, relative . 
to the market at a time when 
it has also' needed to .proride 
additional reserves for bad 
business taken' on in the early 
1970s. Last year's loss ratio of 
73.5 per cent compares favour- 
ably with an industry average 
of 75.5 pec cent 

L & C also - disputes the 
frequently .expressed claim that 
CU is under-reserved in the U.S. 
On the face of it, CU has a case 
to answer. The property 
casualty industry as a whole has 
significantly improved the ratio 
of loss and loss expense reserves 
to earned premiums as the 
market has deteriorated. Last 
year, alone, the ratio improved 
from 98.7 to 104.8 per cent CU, 
by contrast, has reported a pro- 
gressive weakening of the ratio. 
At the end of 1981, it stood at 
only 85.3 per cent. - 
According to L 4= C. these 
figures ignore the fact that CU 
has shifted' the emphasis of Its 
business away from long term 
risks toward shortest ail per- 
sonal lines, at the same time as 
speeding up the process of 
claims settlement. Moreover, its 
own balance sheet is much more 
conservatively financed than It 
was a few years' ago. CU has 
raised £178m from its share- 
holders since 1974, reducing the 
ratio of debt to shareholders 
funds from a peak of almost 100 
per cent to 16 ner cent last year. 

The L & C study makes a 
plausible long-term case for CU. 
But it fails to examine the 
potential pitfalls of a strategy 
which is geared for growth dur- 
ing a period of appalling under- 
writing losses. CU’s U.S. pre- 
mium income grew last year 
at more than twice the rate of 
any of the other 20 leading U.S. 


companies. The giant Aetna 
actually reported a 2.1 per cent 

fall in its premium income. 

To an extent, CU is commit- 
ted to a growth strategy in order 
to fill the capacity which its 
data processing system has 
created and so reduce its very 
high expenses ratio. It could 
hardly have picked a worse 
time. ' The U.S. .industry's 
catastrophe losses almost tripled 
in the first three months of this 
year to a record $404m. . -The 
second, quarter was even worse 
— losses amounted to-S600m. 

Those figures are certainly 
exceptional but the - basic 
underwriting climate is still 
deteriorating. The U.S. industry 
suffered an underwriting loss of 
$t».4bn last year. The position 
is bound lo worsen -this :>ear 
and. without a serious, jolt to 
the system, could carry on -down 
in 1983. CU’s first quarter U.S. 
operating ratio of 115.8. ’was 
hardly reassuring in the circum- 
stances- ' " 

The group can justify a 
growth profile in the U.S. Only 
if it is writing better than aver- 
age risk or if its investment 
performance is sfrong enough 
to 'produce a healthy overall 
return. It has taken a very ipde- 
pendent line on risk assessment, 
believing that the profit iijrcn 
lives it has provided to inde- 
pendent agents will enhance the 
quality of its business. In motor 
tines, it has introduced rating 
para meters wholly different 
from the rest of rhe industry 
It is still far loo early to judge 
the success of these experi- 
ments. 

Its U.S. investment portfolio 
is heavily committed to Federal 
Government bonds with' a 
maturity structure which 
broadly matches the expected 
profile of payment on claims. 
But, in common with the re*! 
of the industry, CU could find 
that its overall return is 
diminish ed if a fall in U.S. in- 
terest rates is not followed 
immediately by an adjustment 
In premium rates. At the 
moment, its rates are among 
the most competitive in (he 
U.S. 

In the present climate, CU 
cannot afford to have its reserv- 
ing policy questioned. There is 
no reason to doubt its assertion 
that reserves are adequate: but 
Che switch towards shorter-fail 
business does not emerge 
clearly from the returns of the 
U.S. insurance department. 

CU can draw little comfort 
from the environment in ;iis 
other main, trading areas— The 
UK Holland and Canada: 3t& 
shares are sustained fay -j>i 
remarkably open-handed distri- 
bution policy and, without 
minimising the considerabls 
long-term potential for growth 
they remain a high risk invest ' 
ment 


f|l' 

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®®S(3JICH WHSKJES BLENDED* BOnUDff 
Perth.Scodand 

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Quality inaa agetrf change. 


pSWittrasr - Kars trysss vstiife 1 ■—« 

Bracken House, Cannon Street. London EC*P <aY. V Pf °r * an ^ JMJWisftnd • the Financial Timas Ltd- 

•" The Financial Trmfts Ltd.. 1982.